GBP/USD Weekly Technical Forecast (Sep 27-Oct 01)

GBP/USD Technical Analysis

At the beginning of the week, the Pound fell to test the 1.55 support line before rising. After a struggle with 1.5650 and with 1.5720 the Pound made a late breakout, but bounced off the 1.5833 line.GBP/USD is now capped by 15833 that supported the pair before it dropped at the beginning of the year and later worked as resistance. It also supported the pair in August. Above, August’s peak at 1.60 serves as the next strong resistance.

Higher, 1.6080 works as the next resistance line, after working as support in January. Above, 1.6270 supported the pair back in 2009 and later worked as resistance. The last resistance line for now is 1.6450, a swing high in January.

Looking down, 1.5720, which accompanies the pair for a long time, now turns into a support line. Below, 1.5650 also switches its role back to support.

1.55 worked in both directions during August and September and serves as the next support line. Below, 1.5350 proved was a strong support line recently, and also many months ago. It’s the next line of support.

Below, 1.5230 resisted the Pound’s rise in July, and now works as support. It’s followed by 1.5220, which supported the pair in July as well.

According to daily Chart we can see that pound has broke level of 1.5600 which was 61.8% of  1.6455-1.4277 and now our next important level is 1.5980 if pound break that level so we could se more upside movement.

According to Daily chart channel we can see pound is struggling to go at lest 1.6200 before any down move



According to Weekly chart we have broke Ascending triangle on upside and i am expecting more upside move.at least 1.6080-1.6200

Final GDP, manufacturing PMI and lots of speeches are part of a busy week for cable traders. Here’s an outlook for the British events and an updated technical analysis for GBP/USD.

The British Pound enjoyed the greenback’s weakness and advanced higher, although it didn’t outshine other currencies, and didn’t test new levels. How will trade now? Let’s start:

1. Final GDP: Tuesday, 8:30. The initial release of British GDP for Q2 was a great surprise and sent cable higher. The second release was even better, but failed to lift the currency. The 1.2% growth rate will probably be confirmed now. The Pound will rock on any result.


2. Current Account: Tuesday, 8:30.Despite being released after the related monthly trade balance figures (the goods part out of the whole account), this quarterly release always has a strong impact on currencies. Q1 saw a big deficit of 9.6 billion, double the early expectations. Q2 is expected to be similar. Note that in Q4, Britain enjoyed a surplus.


3. CBI Realized Sales: Tuesday, 10:00. The Confederation of British Industry surveys a selected group of wholesalers and retailers about future sales. In the past two months, the score has been positive, meaning expectations for a higher volume. From 35 last month, the score is expected to slide down to 27 this month.


4. Adam Posen talks: Tuesday, 13:00. Posen is an external member of the MPC, and has voted to leave the policy unchanged, as most members did. In a speech in Hull, Posen might shed some light about inflation and the state of the economy.


5. Net Lending to Individuals: Wednesday, 8:30. When people borrow money, this boosts the economy and shows confidence. The net lending unexpectedly squeezed last month to 0.3 billion, meaning a slowdown in the economy. A rise to 0.4 billion is predicted now.


6. GfK Consumer Confidence: Wednesday, 23:00. This survey of 2000 consumers refuses to get out of the negative zone for many months, meaning pessimism, although last month’s jump from -22 to -18 was better to expected. A slide back down to -19 will probably be seen now.


7. Nationwide HPI: Thursday, 6:00. According to the Nationwide Building Society, prices of homes fell in the past two months, falling short of expectations. After a drop of 0.9% last month, a more modest fall is expected now – 0.2%. Prices of homes are an important gauge of the economy.


8. Paul Tucker talks: Thursday, 7:00. The deputy governor of the BoE will travel to Brussels and will speak in a conference. He might refer more to European issues than British ones, but he tends to releases headlines that move currencies.


9. BOE Credit Conditions Survey: Thursday, 8:30. This quarterly report deals with situation of credit. It became very important after the outbreak of the financial crisis, as credit freezes paralyzed the markets. This report, for Q3 will probably be good, and help the Pound.


10. Paul Fisher talks: Thursday, 9:05. The third MPC member will speak about loans and banks in a conference in London. Any comments about easing steps (quantitative easing) will rock the currency.


11. Manufacturing PMI: Friday, 8:30. This indicator always rocks the Pound, no matter the outcome. Last month’s score, 54.3 fell short of expectations (57.1) and hurt the Pound. Another drop is expected this month, to 53.9. Note that as long as the figure is above 50 points, it means that purchasing managers see economic expansion. A drop under 50 will inflict damage.

Let’s review the events. All times are GMT.

I am Bullish on GBP/USD.Despite the weakness of the British economy (unemployment for example), the dollar’s weakness prevents significant falls. A rise above 1.60 will be a more bullish sign till 1.6500.

Weekly Recommended Trade: Buy at 1.5750 with Stop loss 1.5640 and Target 1.6050.