Fundamental view:

The British pound edged higher against the US dollar during the trading course of the week. US dollar weakness and the Rate hike from BoE are the major catalysts underpinning the move of the quote. The US Central bank policymakers diluted expectations of a hefty 50 basis points hike in March even with inflation at a 40-year high, Which weighed on US dollar. On the other hand, Bank of England hiked interest rates by 25 basis points and revealed that 4 out of the nine voting members argued for a 50 basis point increase. The decision itself was a hawkish surprise but Governor Bailey’s press conference was dovish in that He said that after being frontload with hikes now, after that he will stop and reassess.

Cable had a fall on Friday after upbeat US NFP data which added 457k new jobs which is very high than the expectation of -192k. And about UK PM Boris Johnson, how long he can hold on to the keys of No.10 Downing Street is questionable. 

In this week, US Nonfarm Payrolls and UK Markit/CIPS Construction PMI on 4^th February boosted downtrend of the pair whereas UK Nationwide HPI yearly report on 1^st February, US ADP Nonfarm Employment Change on 2^nd February and BoE Interest Rate Decision on 3^rd February boosted uptrend of the pair.

The major economic events deciding the movement of the pair in the next week are US EIA Crude Oil Stocks Change, US WASDE Report at Feb 09, BoE Governor Bailey Speech, Initial Jobless Claims, Federal Budget Balance at Feb 10, UK Manufacturing Production monthly report, UK GDP quarterly report and Michigan Consumer Sentiment at Feb 11.  

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.45% higher than the previous week. Maintaining high at 1.3627 and low at 1.3386 showed a movement of 241 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 1.3640 may open a clean path towards 1.3754 and may take a way up to 1.3881. Should 1.3399 prove to be unreliable support, the GBPUSD may sink downwards 1.3272 and 1.3158 respectively. Chart formation of rounding bottom pattern in H4 chart favors prospects of a bullish trend. Bullish harami pattern formation escalates the expectation for a bullish trend.