- GBP/USD was headed for a weekly gain, recovering from multi-month lows on the back of a weak US dollar.
- Data for next week: US inflation and UK manufacturing.
The GBP/USD pair rose on Friday boosted by the decline of the US dollar that extended losses following the NFP report. The pair peaked on Friday at 1.3277, the highest level since June 26.
Cable is about to end the week higher, supported by a weak US dollar and also amid rising expectations of a rate hike from the Bank of England. Last week, before bouncing to the upside, GBP/USD bottomed at 1.3049.
Brexit and UK political concerns limited the move higher. A serious of meetings over the weekend will take place. “PM May and her Cabinet are due to decide on a clear model for Brexit. It’s looking increasingly likely that they’ll opt for a soft-Brexit “Norway Minus” model of full goods integration but no single market for services. Look for leaks Saturday and details on Sunday’s political shows, followed by the release of a 100+ page “white paper” next week. The EU’s response will be critical”, wrote analysts at TDS. The outcome could weigh on GBP at the beginning of the week.
GBP/USD Technical levels
On Friday, the pair is headed toward the first daily close above the 20-day moving average in almost a month. The mentioned MA at 1.3235 is now a support followed by the 1.3200 zone and 1.3145. To the upside, resistance levels might be seen at 1.3290 (Jun 26 high), 1.3315 (Jun 22 high) and 1.3340 (Jun 12 low).
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