Fundamental view:

The British pound has been somewhat bullish during the week but has struggled at the end of the week. This market continues to be one that is going to struggle with the idea of whether or not we get a clean Brexit. The EU and the UK have continued negotiations – on the phone instead of face to face and at various intensity levels. The ongoing communications have kept the pound bid despite posturing. Sterling surged when both sides announced a formal return to formal – and intense – talks, now with a new deadline of mid-November.

Gertjan Vlieghe, a member of the Bank of England, responded to the increase in COVID-19 infections and lockdowns with dovish comments. He said that the outlook risks are skewed toward adding more stimulus and dismissed concerns that negative rates are unproductive.

US NAHB Housing Market Index on 19^th Oct and Oil Inventories on 21^st Oct created a bearish atmosphere for the pair whereas Britain CPI yearly report & PPI Input monthly report on 21^st Oct and Britain Retail Sales monthly report on 23^rd Oct created a bullish atmosphere.

The major economic events deciding the movement of the pair in the next week are UK Nationwide HPI yearly report, US Core Durable Goods Orders monthly report, US CB Consumer Confidence Index at Oct 27, BoE Consumer Credit monthly report, US GDP quarterly report at Oct 29, and US Core PCE Price Index yearly report at Oct 30.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.73% higher than the previous week. Maintaining high at 1.3177 and low at 1.2902 showed a movement of 275 pips.

In the upcoming week we expect GBP/USD to show a bullish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout above 1.3180 may open a clean path towards 1.3316 and may take a way up to 1.3454. Should 1.2905 prove to be unreliable support, the GBPUSD may sink downwards 1.2766 and 1.2631 respectively. Chart formation of ascending scallop pattern in H4 chart favors prospects of a bullish trend. Spinning top pattern formation escalates the expectation for a bullish trend.