British Pound (GBP) Weekly Forecast: GBP/USD, EUR/GBP Testing Range Boundaries
GBP/USD, EUR/GBP Price Analysis & News
- GBP/USD sticks to its range but touches both limits continuously
- EUR/GBP heads towards the lower bound of its range
GBP/USD: The Pound has finished the week relatively unchanged with GBP/USD fluctuating in a tight range throughout. Thursday’s pullback ahead of the US CPI data was rejected at 1.4075 an area that had offered support previously in May. The pair has ventured towards this level a few times over the last month so there does seem to be some sort of pull to bring the pair lower in the short term, given how bullish attempts have been rejected consistently at the 1.42 mark. With some economic data in the calendar next week for the UK, traders are likely to focus on inflation numbers prior to the next BOE meeting in August given Haldane’s recent hawkish comments about tapering bond purchases. They are likely to be paying close attention to the UK’s reopening plan being pushed back, which could cause GBP/USD to break below the lower bound of its range, likely heading towards an attempted break below 1.40.
GBP/USD Daily Chart
EUR/GBP: this pair has also been offering some interesting range trading over the last few weeks. That said, the recent trend seems to have been skewed to the downside, offering a better chance at breaking the lower bound of the range in the coming days. The stochastic oscillator is venturing into the sub-50 territory which indicated that selling pressure is increasing, and EUR/GBP is now trading below its four main simple moving averages, putting further bearish pressure on the pair. Short-term resistance seems to hold at the 0.86 mark, followed by the upper bound of the range at 0.8644. To the downside, key support continues to hold at 0.8560, but I would be looking out for an increase in bearish momentum in a new attempt to bring the pair towards the 0.85 mark.
EUR/GBP Daily Chart
--- Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin
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