Fundamental view:

The British pound initially tried to rally a bit during the course of the week but gave back the gains rather quickly as as the UK entered a harsh lockdown to prevent hospitals from collapsing due to the new virus strain. US Democrats’ win of the Senate sparked a mixed dollar reaction. Prime Minister Boris Johnson made a second somber national address in as many weeks, this time announcing a harsh shuttering. The government responded to the surge in cases, deaths, and hospitalizations, with the latter surpassing levels seen in the first wave. That led to the downside momentum for the pound.

In the previous week, US EIA Gasoline Stocks Change on 6^th January and Europe CPI yearly report on 7^th January framed uptrend movement for the pair whereas BoE M4 Money Supply monthly report on 4^th January and Britain Markit/CIPS Services PMI on 6^th January framed downtrend movement for the pair.

The major economic events deciding the movement of the pair in the next week are BoE Governor Bailey Speech at Jan 11, US JOLTS Job Openings at Jan 12, US CPI monthly report at Jan 13, US Initial Jobless Claims, Fed Chair Powell Speaks at Jan 14, UK GDP monthly report, and US Retail Sales monthly report at Jan 15.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.13% higher than the previous week. Maintaining high at 1.3704 and low at 1.3533 showed a movement of 171 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading below the 50 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.3495 may open a clean path towards 1.3428 and may take a way down to 1.3324. Should 1.3666 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3771 and 1.3838 respectively. Chart formation of bearish gartley pattern in H4 chart favors prospects of a bearish trend. Bearish harami pattern formation escalates the expectation for a bearish trend.