GBP/USD FUNDAMENTAL FORECAST: MIXED
CABLE FUNDAMENTAL BACKDROP
The week ahead holds quite a few market moving events from the pound perspective. Several Bank of England[2] MPC members are scheduled to deliver speeches which could bring some price volatility to GBP crosses. After positive UK economic data this week including employment, retail sales and CPI[3], we could see a more hawkish view adding to the recent pound rally.
A fading bearish run on the dollar[4] could provide some resistance to pound strength with Fed speakers following the hawkish[5] narrative.
Geopolitical tensions are still the main market influencer driving global markets ebbing and flowing from risk on to risk off almost daily. Despite this, the clash between dollar and pound fundamentals looks likely to neutralize each other but with the dollar being over extended (relative to the pound) to the short side, a reversal in the trend could see GBP/USD[6] move lower.
GBP/USD TECHNICAL ANALYSIS
Chart prepared by Warren Venketas[8], IG
GBP/USD[9] price action[10] has been testing channel resistance this week with no established push higher as of yet. Next week could spark the necessary motivation needed should BoE MPC officials add to the already aggressive outlook however, from a technical perspective upper long wicks[11] suggest price rejection at recent swing highs (1.3644).A close below the 1.3600 psychological handle[12] could see bears re-enter, augmenting a downside bias.
Key resistance levels:
- 1.3644
Key support levels:
