British Pound (GBP) Weekly Forecasts: GBP/USD and EUR/GBP
- GBP/USD looking to retest the October 4th multi-month low.
- EUR/GBP breaking through multi-month resistance.
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A quiet UK data week ahead with just the delayed unemployment figures and the flash services and manufacturing PMIs on Tuesday for traders to focus on. Recent UK data has been mixed to weak with the latest inflation figures disappointing. UK inflation remains stickily high, despite official suggestions that price pressures will ease notably going into the end of the year. UK growth remains tepid at best and Governor Andrew Bailey and the MPC will have another difficult decision to make at the next BoE meeting on November 2nd. This uncertainty leaves Sterling at the risk of moving lower.
GBP/USD traders should be aware of the advanced Q3 US GDP release on Thursday 26th. Markets are currently forecasting q/q growth of 4.1%, up from 2.1% in the prior three months. EUR/GBP traders will also need to be watching their screens next Thursday with the latest ECB policy decision announced at 13:15 UK time. The ECB is expected to leave all policy levers untouched.
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Cable remains under pressure against a strong US dollar with any uptick met by sellers. The short-dated simple moving average is guiding the pair lower and a break of the October 4th multi-month low at 1.2038 will open the way to 1.1804, the next level of horizontal support on the daily GBP/USD chart. An ominous 50-day/200-day death cross formed on Tuesday this week adding to negative chart sentiment. Any move higher in cable in the short term will likely occur due to dollar weakness, not Sterling strength.
GBP/USD Daily Price Chart
See How GBP/USD Traders are Currently Positioned
| Change in | Longs | Shorts | OI |
| Daily | -4% | 9% | 2% |
| Weekly | -14% | 12% | -2% |
EUR/GBP is also showing signs of Sterling weakness with the pair breaking out of a multi-month trend in the last two days. EUR/GBP touched 0.8740 on Thursday, a level not seen since early May and a confirmed close and open above the 0.8721 level will leave 0.8800 and 0.8828 as the next levels of resistance. The pair have also broken above the 200-day simple moving average, and this should underpin a further move higher.
EUR/GBP Daily Price Chart
Charts using TradingView
What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
