- US inflation came in lower than expected, boosting the pair.
- Investors will be paying attention to the FOMC meeting minutes next week.
- The bulls will have to break above 1.22795 to continue the uptrend.
The GBP/USD weekly forecast is slightly bullish as it is unclear if the pair can maintain the positive momentum in the coming week with the Fed minutes expected to take center stage.
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Ups and downs of GBP/USD
Bulls tried to make a recovery at the beginning of the week after completing the previous week severely in the red amid a robust US Nonfarm Payrolls report. Strong job data-driven gains in the US dollar could not be maintained as Treasury yields dropped ahead of the crucial Consumer Price Index (CPI) report.
Investors carefully considered the deputy governor of the Bank of England (BOE), Dave Ramsden. He demonstrated the central bank’s willingness to keep selling gilt even if a recession forces it to begin cutting the policy rate.
The US CPI delivered a surprise on USD bulls on Wednesday, sending the US dollar index and yields tumbling as the world’s largest economy’s inflation plummeted more than anticipated.
Next week’s key events for GBP/USD
The labor market report for the UK will be released on Tuesday. The UK inflation and US retail sales figures will be released on Wednesday, which is a significant day for cable traders as they come before the crucial minutes of the July Fed meeting. After the US jobs boom and a weaker CPI reading, hints on the Fed’s future policy course will be anxiously anticipated.
The UK Retail Sales report, which summarizes consumer spending in the country, will be released on Friday, capping off a busy week for the currency pair.
GBP/USD weekly technical outlook: Bulls paused at channel resistance
Looking at the daily chart, we see a descending channel. The price has paused at the channel resistance and is trading above the 22-SMA. It is a sign that bulls are in charge of this market. However, if this trend continues, they will have to break above the 1.22795 resistance level.
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The RSI trades above 50, supporting bullish momentum. If bulls cannot break above 1.22795, the price might break below the 22-SMA and push lower to retest support at 1.18034. For now, the trend will remain bullish as RSI and the 22-SMA support an uptrend.
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