Last week, the GBPUSD managed to make successive lower highs followed by persistent lower lows which turned the whole wave sequence into a bearish structure. To the upside, the 1.3650 – 1.3670 region should act as resistance and only a daily break above 1.2774 last week’s high will invalidate the bearish view. The stochastic indicator is in oversold territory which makes more probable to see a bounce early in the week before any meaningful sell-off to take place.
Ideally, we need first a break below the 1.2500 big psychological number for the bears to take control of GBPUSD. A break below 1.2500 will expose 1.2385 where we can find the low of the week. The UK economic calendar looks heavy in term of risk events that can drive volatility higher. On Tuesday the Retail Sales and the CPI inflation figures are on the docket and the general consensus is for the inflation figures to inch higher due to the dramatic slide in GBPUSD since the Brexit event.
On Thursday the BOE interest rate decision is expected to be the dominant market theme for the GBPUSD exchange rates. The risks remain to the downside as the BOE is expected to come unchanged.
Previous GBPUSD Weekly Forex Forecast
GBPUSD Weekly Forex Forecast – 12th to 16th Dec 2016 – Bearish
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