Fundamental view:

The British pound rallied against the greenback in this week. The major reason are Brexit calm and clearer Fed path. The soothing news from Brexit has helped send sterling higher. Alongside a moderate tapering path from the Fed, inflation concerns failed to stop cable’s climb. UK inflation stands out, as it could determine the BOE’s next decision. On the other hand, Fed officials gave mixed messages around inflation:  while Vice-Chair Richard Clarida said it would fade, Atlanta Fed President Raphael Bostic seemed to think it would stick. However The FOMC Meeting Minutes provided clarification that Fed laid down a timeline for beginning the tapering process starting in mid-November and ending it within eight months.

Britain NIESR GDP Estimate on 11th Oct and US CPI yearly report on 13th Oct created bearish trend whereas Britain Claimant Count Change on 12th Oct and Britain RICS House Price Balance on 14th Oct created bullish trend for the Pair.

The major economic events deciding the movement of the pair in the next week are Fed Industrial Production yearly report at Oct 18, UK Core CPI monthly report, EIA Crude Oil Stocks Change at Oct 20, Philadelphia Fed Manufacturing Index, Initial Jobless Claims at Oct 21, UK Retail Sales monthly report and Markit Manufacturing PMI at Oct 22.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.84% higher than the previous week. Maintaining high at 1.3773 and low at 1.3568 showed a movement of 205 pips.

In the upcoming week we expect GBP/USD to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1.3819 may open a clean path towards 1.3898 and may take a way up to 1.4024. Should 1.3614 prove to be unreliable support, the GBPUSD may fall downwards to 1.3488 and 1.3409 respectively. Chart formation of rounding bottom pattern in H4 chart creates prospects of a bullish trend. Whereas Harami pattern formation favors the expectation for a bullish trend.