Last week’s GBPUSD up drift lack momentums and it failed to produce a close above the 200-day moving average a key resistance level which is constructive for the bearish case. The downside channel formed in the aftermath of Brexit event is also keeping the price action inside a wide trading range with 1.3500 big psychological number limiting the upside and 1.2800 acting as a multi-decade support level. The first major hurdle for the bears come at the big round number 1.3000 which is a major support level. Last Friday we had the first unsuccessful attempt to break below 1.3000, but since the price ranges are narrowing and with the increased buildup in stops below this figure, we should expect earlier in the week another bear attack to break below 1.3000. The upside remains limited by the 200-day EMA and the downside channel upper limit which from a confluence area near the 1.3120 figure. The UK economic calendar lacks any major event risk that can disturb the volatility, meaning that Brexit negative sentiment will continue to be the price driver. On the other hand, this also suggests more consolidation and the downside to be limited to last week low at 1.2865.

GBPUSD Weekly Forex Forecast 22nd to 26th August 2016 - BEARISH