Fundamental view:

The British pound booked loss against the US dollar amid hawkish Fed-driven and risk-averse market sentiment. The risk-off flows and the dollar’s demand remained the central narrative this week which pushed the pound to book losses. Fed March meeting’s minutes delivered a hawkish surprise. The minutes revealed that the board members outlined plans to reduce the balance sheet by more than $1 trillion a year while hiking interest rates. This alongside the hawkish Fed commentary and upbeat US Services PMI data cemented a deal for a 50 bps lift-off in May, underscoring the monetary policy divergence between the Fed and the BOE.

Moreover, the UK announced a full asset freeze on the largest Russian bank while announcing to end all imports of Russian coal and oil by the end of 2022 which also weighed on the Pound. 

In this week, UK S&P Global/CIPS Services PMI on 5^th April and EIA Crude Oil Stocks Change on 6^th April underpinned bullish trend whereas FOMC meeting on 6^th April and US Initial Jobless claim on 7^th April underpinned bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are UK Manufacturing Production monthly report, UK GDP monthly report at Apr 11, UK Claimant Count Change, Federal Budget Balance at Apr 12, UK CPI monthly report at Apr 13, US Retail Sales monthly report, Initial Jobless Claims, Michigan Consumer Sentiment at Apr 14 and Fed Industrial Production yearly report at Apr 15.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.12% lower than the previous week. Maintaining high at 1.3167 and low at 1.2982 showed a movement of 185 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. Should 1.2951 proves to be unreliable support then the pair may fall further to 1.2874 and 1.2766 respectively whereas a solid breakout above 1.3136 will open a clear path upward to 1.3244 and then will further raise up to 1.3321. 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.