GBP/USD Weekly Forecast (18th April 2022 – 22nd April 2022)

Fundamental view:

The Britain pound traded up against the US dollar during the trading course of the week, However Broad US dollar strength did not allow pound to gain much. The risk averse market sentiment due to Russia- Ukraine conflict and the hawkish Fed helped the US dollar. US Federal Reserve officials reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet.

On the other hand, The Bank of England (BOE) is facing a tougher balancing act than the US Federal Reserve with regard to policy tightening. Both central banks are looking to battle inflation but the BOE is growing increasingly concerned over the uncertainty surrounding the growth outlook in the face of a protracted Russia-Ukraine conflict.

In this week, US CPI monthly report on 12^th April and US PPI monthly report on 13^th April boosted downtrend whereas UK Manufacturing Production monthly report on 11^th April , Uk Claimant Count Change on 12^th April and US Initial Jobless Claims on 14^th April boosted the uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, BoE Governor Bailey Speech, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21, UK Retail Sales monthly report and US S&P Global Manufacturing PMI at Apr 22.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.15% lower than the previous week. Maintaining high at 1.3147 and low at 1.2973 showed a movement of 174 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 1.2973 proves to be unreliable support then the pair may fall further to 1.2886 and 1.2799 respectively whereas a solid breakout above 1.3147 will open a clear path upward to 1.3234 and then will further raise up to 1.3321. Chart formation of bearish crab pattern in H4 chart favors prospects of a bearish trend. Bearish harami pattern formation escalates the expectation for a bearish trend.