Fundamental view:
The British pound fell in the previous week .UK presented draft legislation that upends some of the Brexit Withdrawal Agreement, and the EU responded angrily. The news overwhelmed everything else and pounded the pound. Britain Halifax HPI on 11th Sept favored uptrend for the pair whereas US JOLTS Job Openings on 9th Sept and US CPI monthly report on 11th Sept favored downtrend for the pair
The problem in the brexit deal and the rising cases of corona virus in UK is pressurizing pound and in the upcoming week we expect the GBP to fall.
The major economic events deciding the movement of the pair in the next week are UK Claimant Count Change at Sep 15, UK CPI yearly report at Sep 16, US Core Retail Sales monthly report, FOMC Economic Projections at Sep 16, UK MPC Official Bank Rate Votes, Unemployment Claims at Sep 17, and US CB Leading Index monthly report at Sep 18.
GBP/USD Weekly outlook:
Technical View:
Last week’s high was 1.65% lower than the previous week. Maintaining high at 1.3259 and low at 1.2762 showed a movement of 497 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 1.2620 may open a clean path towards 1.2443 and may take a way down to 1.2123. Should 1.3116 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3436 and 1.3613 respectively. Chart formation of Pennant pattern breakout in H4 chart favors prospects of a bearish trend. Bearish harami pattern formation escalates the expectation for a bearish trend.
| Preference |
| Sell: 1.2822 target at 1.2444 and stop loss at 1.3119 |
| Alternate Scenario |
| Buy: 1.3119 target at 1.3435 and stop loss at 1.2815 |
