GBP/USD Weekly Forecast (08th February 2021 – 12th February 2021)

Fundamental view:

Pound formed a rally against greenback in the past week. The BOE has shut the door on negative rates. The Bank of England will continue working on the technicalities of negative rates, but it has also assured investors that the topic is off the table. BOE Governor Andrew Bailey and his colleagues have also raised their estimate for growth in the fourth quarter of 2020 – raising the base for future gains. Alongside an acknowledgment of vaccines’ positive impact, the pound staged a rally. 

Britain BoE M4 Money Supply m/m & US Markit Manufacturing PMI on 1^st February and Britain Nationwide HPI monthly report & Nationwide HPI yearly report on 2^nd February created downtrend for the pair whereas US ISM-NY Business Conditions Index & ISM-NY Current Business Conditions on 3^rd February and Britain Markit/CIPS Construction PMI on 4^th February created a uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are BoE Governor Bailey Speech at Feb 08, US JOLTS Job Openings at Feb 09, US CPI monthly report, US EIA Crude Oil Stocks Change, Federal Budget Balance at Feb 10, US Initial Jobless Claims at Feb 11 and UK GDP quarterly report at Feb 12.  

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.01% lower than the previous week. Maintaining high at 1.3758 and low at 1.3566 showed a movement of 192 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 upside. A solid breakout below 1.3614 may open a clean path towards 1.3494 and may take a way down to 1.3422. Should 1.3806 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3878 and 1.3997 respectively. Chart formation of double top pattern in H4 chart favors prospects of a bearish trend. Spinning top pattern formation escalates the expectation for a bearish trend.