Fundamental view:

The British pound initially fell during the course of the week but then turned around to show signs of strength. The US currency has been unable to continue January’s modest improvement and faces a test in the week ahead with payrolls on February 5. The UK employment picture, better than expected despite the pandemic provided the pound with some additional support in a week with little data. Brexit did not impact much the trend.

US Durable Goods Orders excl. Defense monthly report on 27^th January and  US New Home Sales on 28^th January favored downtrend whereas US Chicago Fed National Activity Index on 25th January and US CB Consumer Confidence Index on 26^th January favored uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Feb 01, US ADP Nonfarm Employment Change, US ISM Non-Manufacturing PMI at Feb 03, BoE Interest Rate Decision, US Initial Jobless Claims at Feb 04, BoE Governor Bailey Speech, and US Nonfarm Payrolls at Feb 05.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.09% higher than the previous week. Maintaining high at 1.3759 and low at 1.3610 showed a movement of 149 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.3620 may open a clean path towards 1.3540 and may take a way down to 1.3471. Should 1.3769 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3838 and 1.3918 respectively. In H4 chart, if breakout of the head and shoulders neckline then bearish expectation is favored. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.