GBP/USD Weekly Forecast (04th October 2021 – 08th October 2021)

Fundamental view:

The British pound has fell against the greenback during the course of the trading week. Fed Reserve Powell’s comments has supported the US dollar. US 10-year Treasury yields hit 1.50% in this week . Another concern which has temporarily supported the safe-haven dollar was the fear that the US would default on its debt. Treasury Secretary Janet Yellen warned that America would hit its debt limit by October 18 if Congress did not act.  On the other hand, UK Prime Minister Boris Johnson prepared the army to provide gasoline to dried-out petrol stations. Whereas Brexit hit the pound also via a new EU-UK row over the Northern Irish protocol and a recent French-British clash over fishing. 

US Initial Jobless Claims on 30th Sep and Britain Markit/CIPS Manufacturing PMI on 1st Oct created bullish trend whereas US Core Durable Goods Orders monthly report on 27th Sep and Britain BoE Mortgage Approvals on 29th Sep created bearish trend for the pair in this week.

The major economic events deciding the movement of the pair in the next week are OPEC Meeting at Oct 01, US ISM Non-Manufacturing PMI at Oct 05, US ADP Nonfarm Employment Change, US EIA Crude Oil Stocks Change at Oct 06, UK Labour Productivity yearly report, US Initial Jobless Claims at Oct 07, BoE FPC Meeting Minutes and US Nonfarm Payrolls at Oct 08.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.16% lower than the previous week. Maintaining high at 1.3729 and low at 1.3411 showed a movement of 318 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.3393 may make a fall towards 1.3243 and then may take a way down to 1.3075. Should 1.3711 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3879 and 1.4029 respectively. Chart formation of bearish butterfly pattern in H4 chart favors prospects of a bearish trend. Bearish harami pattern formation escalates the expectation for a bearish trend.