Fundamental view:

The British pound rallied against the greenback during the trading course of the week. The move behind that can be linked to the hopes of fewer hospitalizations due to Omicron variant and month, quarter, and year-end flow. The British pound also had a nice bounce due to the fact that the UK decided not to lock itself down again. As new year 2022 begins, traders are concentrating on higher inflation, central bank tightening, led by the Federal Reserve, the coronavirus pandemic, and China’s economic outlook.

In this week, CFTC GBP Non-Commercial Net Positions on 27^th December and Baker Hughes US Oil Rig Count on 30^th December favored bearish trend whereas Pending Home Sales monthly report on 29th December and UK Nationwide HPI monthly report on 30^th December favored bullish trend.

The major economic events deciding the movement of the pair in the next week are OPEC Meeting, BoE Consumer Credit monthly report, US ISM Manufacturing PMI at Jan 04, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change, FOMC Minutes at Jan 05, UK Markit/CIPS Services PMI, Initial Jobless Claims at Jan 06 and US Nonfarm Payrolls at Jan 07.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.83% higher than the previous week. Maintaining high at 1.3549 and low at 1.3390 showed a movement of 159 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 1.3579 may open a clean path towards 1.3643 and may take a way up to 1.3738. Should 1.3420 prove to be unreliable support, the GBPUSD may sink downwards 1.3325 and 1.3261 respectively. Chart formation of ascending scallops pattern in H4 chart favors prospects of a bullish trend. Hammer pattern formation escalates the expectation for a bullish trend.