Fundamental view:

The British pound has fallen during the course of the trading week to reach below 1.35 level. The employment figures in the United States were stronger than the anticipation which helped the US dollar. The US Central Bank had kept interest rates unchanged at 0.25% which was widely expected and announced the reduction of its asset purchases by $15 billion per month. On the other hand, the Bank of England decide to punt on tapering, thereby risking a slowdown due to inflation. “Markets must make unconditional calls in response to the conditional statements” said Bank of England Governor Andrew Bailey. In an attempt to explain why markets could not put on the decision to leave interest rates unchanged. Only two out of nine members opted for fighting rising inflation with higher borrowing costs. Pound fell sharply in response.

Britain Nationwide HPI yearly report and Britain Markit/CIPS Services PMI on 3rd November favored bullish trend for the pair whereas ISM Manufacturing PMI on 1st November and  BoE Interest Rate Decision on 4th November favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Speech at Nov 08, US Initial Jobless Claims, US Federal Budget Balance at Nov 10, UK Manufacturing Production monthly report, UK GDP quarterly report at Nov 11, US JOLTS Job Openings and Michigan Consumer Sentiment at Nov 12.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.95% lower than the previous week. Maintaining high at 1.3698 and low at 1.3424 showed a movement of 274 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 firm breakout below 1.3378 may fall to 1.3264 and may take a way down to 1.3104. Should 1.3652 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3812 and 1.3926 respectively. Chart formation of descending and inverted scallop pattern in H4 chart favors prospects of a bearish trend. Shooting star pattern formation escalates the expectation for a bearish trend.