Fundamental view:

The British pound dropped against the US dollar during the trading course of the week. Monetary policy divergence between the Fed and the BoE weighed heavily on the cable. BOE Governor Andrew Bailey turned down the rate hike expectation of May. On Monday, Bailey said the ‘situation is very volatile’ when asked about the May rate decision. On contrary, hawkish comments from the slew of Fed policymakers had already ramped up 50 bps rate rise expectations next month. Moreover, a lack of progress in the Russia- Ukraine crisis and global growth concerns also weigh on the pound.

The US economy gained 431,000 jobs in April, which is far higher than 80,000 expected, moreover, upward revisions, higher wages and a low unemployment rate of 3.6%  keeps the Fed on track for aggressive monetary policy, which favored the greenback.

In this week, US Goods Trade Balance on 28^th March and UK GDP quarterly report on 31^st March favored the bullish trend whereas US ADP Nonfarm Employment Change on 30^th March, UK Markit/CIPS Manufacturing PMI and Nonfarm Payrolls report on 1^st April favored the bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are BoE Governor Bailey Speech at Apr 04, US ISM Non-Manufacturing PMI, Fed Governor Brainard Speech at Apr 05, EIA Crude Oil Stocks Change, FOMC Minutes at Apr 06, UK Labour Productivity yearly report, US Initial Jobless Claims at Apr 07 and US WASDE Report at Apr 08.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.86% lower than the previous week. Maintaining high at 1.3183 and low at 1.3051 showed a movement of 132 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 1.3047 proves to be unreliable support then the pair may fall further to 1.2983 and 1.2915 respectively whereas a solid breakout above 1.3179 will open a clear path upward to 1.3247 and then will further raise up to 1.3311. Chart formation of symmetrical triangle breakout downside in H4 chart favors prospects of a bearish trend. Three inside down pattern formation escalates the expectation for a bearish trend.