Fundamental view:

The British pound has rallied to break above the 1.35 level during the week. The EU and the UK leveled up the pound with Level-Playing Field progress – and now it is down to fish to seal a Brexit deal. Apart from the incessant noise of headlines from the talks, investors may have time to take stock of a turbulent end to 2020 in the short holiday week. Comments from the talks in Brussels and from officials in London have generally moved in a positive direction which helped the pound.

During the week, US Building Permits on 17^th December and US Current Account & US CB Leading Index monthly report created bearish atmosphere whereas Britain Unemployment  on 15^th December and US TIC Long-Term Purchases on 16^th December favors bullish environment for the pair.

The major economic events deciding the movement of the pair in the next week are UK GDP quarterly report, UK Business Investment quarterly report, US GDP quarterly report, US CB Consumer Confidence Index at Dec 22, US Core Durable Goods Orders monthly report, and US Initial Jobless Claims at Dec 24.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 1.09% higher than the previous week. Maintaining high at 1.3625 and low at 1.3280 showed a movement of 345 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 downside. A solid breakout above 1.3675 may open a clean path towards 1.3822 and may take a way up to 1.4019. Should 1.3330 prove to be unreliable support, the GBPUSD may sink downwards 1.3133 and 1.2986 respectively. Chart formation of inverse head and shoulders pattern in H4 chart creates prospects of a bullish trend. Hammer pattern formation escalates the expectation for a bullish trend.