Fundamental view:

The British pound pulled back a bit during the course of the week, but then turned around to form a bullish rally. The pound surged on the broad dollar’s weakness and despite a tepid market’s mood. In the past week, the UK reported over 50K new coronavirus cases, resulting in UK Health Secretary Matt Hancock announcing more restrictive measures in the kingdom. Simultaneously, the AstraZeneca coronavirus vaccine has been approved for emergency use in the UK and the country plans to start using it as soon as next week.

In the previous week, Britain Nationwide HPI yearly report on 30^th Dec and US MNI Chicago Business Barometer & Pending Home Sales m/m-2.6%2.6%-0.9% on 30^th Dec created downtrend for the pair whereas Dallas Fed Services Business Activity on 29^th Dec and US Initial Jobless Claims 4-Week Average & EIA Natural Gas Storage Change on 31^st Dec created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are UK Markit/CIPS Manufacturing PMI, OPEC Meeting at Jan 04, US ISM Manufacturing PMI at Jan 05, BOE Gov Bailey Speaks, US ADP Nonfarm Employment Change at Jan 06, US Initial Jobless Claims, US ISM Non-Manufacturing PMI at Jan 07, and US Nonfarm Payrolls at Jan 08.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.49% higher than the previous week. Maintaining high at 1.3686 and low at 1.3429 showed a movement of 257 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 upside. A solid breakout above 1.3757 may open a clean path towards 1.3850 and may take a way up to 1.4014. Should 1.3499 prove to be unreliable support, the GBPUSD may sink downwards 1.3336 and 1.3242 respectively. Chart formation of ascending triangle pattern breakout in H4 chart favors prospects of a bullish trend. Bullish engulfing pattern formation escalates the expectation for a bullish trend.