The GBPUSD broke to the downside through several key levels and as long as we trade below the big psychological number 1.4000 we should expect the current bearish tone to drive the market more to the downside. However, in the short-term, we can still expect a pullback because the downside looks overextended. The first level of support only comes at the previous swing low 1.3712 which should hold the downside for a reaction higher. However, we can’t rule a false break below that should be quickly bought because the stochastic indicator is also in oversold territory which supports the idea of a short-term rally.
On the upside, the first level of resistance only comes at 1.3900 which should contain any rally. But, a break and a daily close above 1.3900 can open the door for a retest of the big round number 1.4000. There are only modest risk events on the UK economic calendar, however from the other side of the monetary policy spectrum; we have the Fed interest rate decision which is the highlight risk event of the week. The Fed is expected to hold rates on hold but what matters most is they start using a more aggressive hawkish language.
Previous GBPUSD Weekly Forex Forecast
GBPUSD Weekly Forex Forecast – 30th April to 4th May 2018
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