Search ForexCrunch
  • GBP/USD rose 1.2% in the week that just ended and settled very close to 1.4000.
  • The Delta variant of Covid-19 threatens the US, while there is some good news in the UK.
  • Fed announcements weakened the US Dollar, and the Bank of England meeting raises expectations.

The differences in expectations for the US and British economies have been reflected in the appreciation of the GBP/USD weekly analysis. On the British side, the Covid-19 pandemic presented a significant improvement. At the same time, in the United States, there is an increasing fear of infections with the Delta variant of the coronavirus that has even caused the CDC to recommend the use of masks even among those vaccinated.

Are you interested to learn more about buying cryptocurrencies? Check our detailed guide-

The situation of the main financial entities of both countries is also contrary. While the Fed’s announcements and preliminary growth results for the second quarter weakened the US Dollar, the Bank of England meeting next week held positive expectations from investors. This meeting will take place on Thursday, and until then, the speculation about the BOE announcements will benefit the British Pound.

Fed Chairman Jerome Powell said that more targets still need to be reached before the bank begins reducing its purchase of securities that currently stand at $120 billion a month. Powell himself explained that these objectives refer to price stability and employment. Additionally, other bad results were published this week for the Dollar. Durable goods orders were weaker than expected, and growth was corrected down in the first quarter.

The contrast between the Fed and how the Bank of England addresses the inflation issue benefits the British Pound. The Fed has ruled out the issue of inflation, assuming that it is temporary.

Are you interested to learn more about forex robots? Check our detailed guide-

Upcoming events for the GBP/USD

The most relevant event for this pair will take place on Thursday with the meeting of the Bank of England. As already mentioned, speculation about what may happen at this meeting keeps bullish expectations alive. This Friday, the unemployment rate and NFP report will be announced on behalf of the United States.

GBP/USD weekly news analysis

GBP/USD technical analysis: Upward trend capped by 1.4000

The bearish correction that occurred on Friday meets the 61.8% Fibonacci support level. The momentum of the pair diminished this Friday amid profit-taking.

GBP/USD weekly analysis on daily chart
GBP/USD weekly analysis on daily chart

For next week, consolidation is expected, and the pair points to 1.4000. However, there are resistance levels before 1.4000. The 100-day moving average is at 1.3924, and the 50% Fibonacci is at 1.3917.

GBP/USD: Next week forecast

The trend for next week will be bullish for the GBPUSD. However, it is most probable that the price will remain below 1.4000, although it depends on the BOE meeting on Thursday. In case of exceeding the price of 1,400, an important psychological barrier would be broken, accelerating the uptrend.

Looking to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.