Home GBP/USD Weekly Forecast: Can the Weekly gains propel bulls?
GBP USD Forecast

GBP/USD Weekly Forecast: Can the Weekly gains propel bulls?

  • GBP/USD gained 0.17% during the previous week. 
  • The British pound was pulled down this week by a strong greenback and risk aversion.
  • The broad-based US strength can restrict the bulls from going further. 

The GBP/USD weekly forecast is neutral as the risk-averse market and rising US Treasury rates helped the dollar outperform its peers at the start of the week.

Although the first market response to the US inflation news weakened the dollar, hawkish Fed rhetoric spurred a surge in US T-bond rates late Tuesday.

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Despite the sizzling UK inflation statistics, GBP/USD struggled to gain traction until the currency came under significant selling pressure amid falling US rates during US trading hours on Wednesday.

BoE breaking sweat

The Bank of England (BOE) has a more difficult balancing act than the US Federal Reserve in terms of policy tightening. 

Both central banks are concerned about inflation, but the Bank of England is growing increasingly anxious about the uncertainties surrounding the economic forecast in the context of a prolonged Russia-Ukraine war.

The Feds stance

When Jerome Powell delivers his final public statements before the Federal Reserve’s pre-meeting quiet period next month, he may bolster betting that the Fed will hike interest rates by a half-point.

Powell has previously stated that a 50 basis-point hike is probable at the Fed’s meeting on May 3-4.

GBP/USD Forecast: Week Ahead

From the UK we have S&P Global/CIPS Manufacturing and UK Services PMI Flash. 

gbp/usd weekly forecast

In the United States, the docket will reveal the S&P Global Manufacturing and Services PMIs. Additionally, the Fed chairman will speak at an event on Thursday.

gbp/usd weekly forecast

What to look for?

The underlying picture implies that the GBP/USD will struggle to produce a sustained rebound unless markets are convinced of the BOE’s intentions to embrace a more aggressive tightening posture.

GBP/USD losses, on the other hand, maybe restricted in the short term since the sterling remains a better choice than the euro and the Japanese yen.

GBP/USD weekly technical forecast: Bulls remain limited for now

gbp/usd weekly forecast

The GBP/USD finished the last trading day in the red, although it gained 0.17% overall. The 20, 50, 100, and 200 SMAs appear to be rejecting the bulls, and the downside remains intact.

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1.3000 would be the first support level for the GBP/USD. If we see a downward move below this level, then the next support lies around 1.2920.

The initial level of resistance for the GBP/USD is around 1.3100. If the Cable settles above this level, it can reach the next resistance level at 1.3150.

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Saqib Iqbal

Saqib Iqbal

Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis.