The GBP/USD posted three consecutive bearish weekly bars which are constructive for our bearish case scenario. On a purely technical perspective, we have the stochastic indicator resetting and this crossover can provide us with another retest of the 1.3070 resistance level that can prove to be a short-term rally as long as we stay below the downward trendline drawn from the September highs.
To the downside, the first major support level comes at 1.2868 and only a break below this swing low threaten a much deeper sell-off that can send GBP/USD levels not seen in the last three decades.
The UK economic calendar looks softer and the only fundamental catalyst that can boost volatility can come from their US counterparts in the form of the Durable Goods which is a major risk event scheduled on Wednesday. The general consensus sees a modest increase of -1.4% in durable goods orders down from 4.4%, which can provide some support for GBP/USD exchange rates.
GBPUSD is certainly on a downtrend but this week we might see a bounce in price moving the GBPUSD nearer to the down trendline before resuming its downward movement. A break above the trendline of course will signal a new uptrend. For now, we remain bearish on GBPUSD for the coming week.
GBPUSD Weekly Forex Forecast – 26th to 30th Sept 2016 – BEARISH
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