GBP/USD Weekly Outlook

British Pound plunged for an eighth week with a 7% decline off the yearly high now testing the key support. Battle lines drawn on the GBP/USD weekly technical chart.

The cable was held back by the US dollar, which despite giving a big chunk of its post-election gains on Thursday, rebounded strongly on Friday, giving a bearish GBP/USD forecast for the week ahead.

A firmer risk tone owing to positive company earnings, slight easing of bond yields and technical selling all weighed on the US dollar. However, the trend remains bullish for the greenback, especially as we are now getting quite close to the US presidential election, with Trump starting to lead in the polls. This should keep the ongoing GBP/USD forecast mildly bearish, despite today’s recovery in the cable.

It’s been tough sledding for Cable so far in Q4, but bulls have started to show defense of a major psychological level. Meanwhile, GBP/JPY is holding on to a bullish breakout setup as we go into next week.

As we look forward to the week ahead, the lack of any major US data could see the greenback give back some of its recent gains, although that is not to say that the GBP/USD forecast will necessarily turn bullish, as the upside potential could be limited. We have some important data from the UK, though.

The British Pound breakout extended into initial resistance hurdles at fresh yearly highs. Battle lines drawn on the GBP/USD weekly technical chart heading into Q4.