Category: GBP USD Forecast

GBP/USD Forecast Aug. 31-Sep. 4



It was a dismal week for GBP/USD, which plunged almost 300 points. The pair closed the week at 1.5384, its lowest weekly close since early June. This week’s highlights are the PMI reports. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD.

The financial meltdown due to the Chinese stock market crash caused havoc in the currency markets as well, and the pound plummeted as panicky investors sought the safety of the US dollar. In the UK, GDP posted a gain of 0.7% and matched the forecast, but this wasn’t enough to stop the pound’s hemorrhaging.

Updates:

GBP/USD graph with support and resistance lines on it. Click to enlarge:

GBP_USD_Forecast.Aug31-Sep4

  1. Manufacturing PMI: Tuesday, 8:30. Manufacturing PMI has been steady in recent readings. The index rose slightly in July, with a reading of 51.9 points, which was within expectations. No change is expected in the August release.
  2. Net Lending to Individuals: Tuesday, 8:30. This indicator is closely linked to consumer spending and confidence, which are key drivers of the economy. The indicator improved to GBP 3.8 billion in July, well above the estimate of GBP 3.0 billion. Little change is expected in the August report, with a forecast of GBP 3.9 billion.
  3. Construction PMI: Wednesday, 8:30. The index dipped to 57.1 points in July, surprising the markets which had expected a stronger reading of 58.6 points. The forecast for the August report is 57.6 points.
  4. Services PMI: Thursday, 8:30. The week concludes with Services PMI, the third PMI report of the week. The index softened in July, coming in at 57.4 points. This was well off the forecast of 58.1 points. Little change is expected in the August release.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.5674 and quickly touched a high of 1.5818. It was all downhill from there, as the pair dropped all the way to 1.5333, testing resistance at 1.5341 (discussed last week). The pair closed the week at 1.5384.

Live chart of GBP/USD:


Technical lines from top to bottom

With GBP/USD posting sharp losses last week, we begin at lower levels:

1.5825 was an important cap in November 2014.

1.5769 is the next resistance line.

1.5682 was an important cap in December 2014 and January 2015.

1.5590 continues to have a busy August. It has switched to a resistance role.

1.5485 was also broken during the pair’s  sharp descent, and is currently an immediate resistance line.

1.5341 is a weak support level and could see further activity during the week.

1.5269 was an important support level in March.

1.5163 was an important support line in early June.

1.5026 has provided support since April.

1.4856 is the final support level for now.

I am bearish on GBP/USD.

The Chinese crisis exposed the weakness of the pound, which plunged last week after indecisive movement for much of the summer. The US economy remains on track, and any signs of a rate hike from the Fed will be bad news for the shaky pound.

In our latest podcast we explain what’s going on with EUR and China before previewing the big events ahead:

[audio mp3="http://www.podtrac.com/pts/redirect.mp3/www.marketmoverspodcast.com/wp-content/uploads/2015/08/Market-Movers-August-28.mp3"][/audio]

Follow us on Stitcher.

Further reading:

GBP/USD Forecast Aug. 24-28

GBP/USD Forecast Aug. 24-28

GBP/USD had a largely uneventful week and closed almost unchanged. The pair closed the week at 1.5670. This week’s highlight is Second Estimate GDP. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. The Fed minutes brought more uncertainty to the timing of a rate hike, [&hellip

GBP/USD Forecast Aug. 17-21

GBP/USD Forecast Aug. 17-21

GBP/USD rebounded last week, posting gains of close to 100 points. The pair closed the week just shy of 1.5597. This week’s highlights are CPI and Retail Sales. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. UK wages grew at a lower pace than expected, and that [&hellip

GBP/USD Forecast Aug. 10-14

GBP/USD Forecast Aug. 10-14

GBP/USD reversed directions last week, as the pair dropped about 170 points. The pair closed the week at 1.5615. This week’s highlights are the Average Earnings Index and Claimant Count Change. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. In the UK, the pound took a hit after the [&hellip

GBP/USD Forecast Aug. 3-7

GBP/USD Forecast Aug. 3-7

GBP/USD changed directions last week and gained close to 100 points. The pair closed the week at 1.5615. This week’s highlight is the PMIs and Manufacturing Production. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. In the US, the Federal Reserve remained cautious in its policy statement [&hellip

GBPUSD Rejects Daily Resistance Level – Bearish Reversal Candle

GBPUSD Rejects Daily Resistance Level – Bearish Reversal Candle

GBPUSD has been stuck in this holding pattern under a stubborn resistance level on the daily chary, which has been containing price for the past couple of weeks. Again, the market moved up into this resistance level and the higher prices were denied, and pushed back lower to create a bearish rejection candle in response [&hellip

GBP/USD Forecast July 27-31

GBP/USD Forecast July 27-31

GBP/USD posted sharp losses last week, as the pair lost 130 points. The pair closed the week at 1.5473. This week’s highlight is Preliminary GDP. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. A weak Retail Sales report out of the UK hurt the pound, as [&hellip

GBP/USD Forecast July 20-24

GBP/USD Forecast July 20-24

GBP/USD reversed directions last week, posting modest gains. The pair closed the week at 1.5581. This week’s highlight is Retail Sales. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. In the US, retail sales was dismal and consumer sentiment fell short of expectations. Over in the UK, inflation numbers [&hellip

GBP/USD Forecast July 13-17

GBP/USD Forecast July 13-17

GBP/USD lost ground for a third straight week, losing about 100 points. The pair closed the week at 1.5443. There are 10 events this week, led by CPI and Claimant Count Change. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. The Fed minutes showed caution towards a rate [&hellip

GBP/USD Forecast July 6-10

GBP/USD Forecast July 6-10

GBP/USD sustained sharp losses for a second straight week, losing about 140 points. There are 12 events this week. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD. US job Nonfarm Payrolls showed a gain 223K jobs in June, a sharp dip from the month before but only [&hellip

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