The GBPUSD two-week rally has made a strong case for the bullish case and the prospects of a full-scale reversal or at least a deeper retracement. The weekly close above the 1.2500 big psychological number is indicative of more GBPUSD strength. However, we can still see a downside break and a retest of 1.2432 support level before more strength to be seen.

The stochastic indicator has also turned down and is in oversold territory which suggest the current retracement has gone too far. To the upside, we have 1.2763 last week high which can act as resistance but more likely if challenged that level can give up quite easily given the recent GBPUSD strength. The UK economic calendar looks busy as on Thursday we have the BOE interest rate decision. Despite the recent UK economic growth and no signs of a slowdown post-Brexit the BOE is unlikely to hike rates this year. The ongoing Brexit process will also be a big theme for GBPUSD volatility. Last week the UK government published a bill to start the UK exit from the EU which gives the Britain parliament only five days to debate the bill. Traders should pay closer attention any news on this subject as it can be the catalyst for some spikes in the GBP/USD exchange rate. Previous GBPUSD Weekly Forex Forecast

GBPUSD Weekly Forex Forecast - 30th Jan to 3rd Feb 2017 - Bearish