Over the past few weeks the GBPUSD price range has become narrower as we’re trading inside a well-established price consolidation between 1.2080 support level and 1.2330 resistance level. Until we won’t get a clear breakout on either side of the market, it’s safe to assume that the range will continue. On an intraday basis, we can’t rule out the possibility of a false breakout below 1.2080 for a quick retest of the big psychological number 1.2000. While a break and a close above the 1.2330 resistance will open the door for a deeper retracement into the big round number 1.2500.
The Stochastic indicator has again broken below the 30 line and is in extreme oversold conditions on multiple time frames, which can support the bullish case for a GBPUSD rally early in the week, maybe to possible retest 1.2330 resistance.
The UK economic calendar looks busy and Tuesday, traders need to pay attention to the UK Markit Manufacturing PMI figures. Despite the Brexit headwinds the UK business conditions are expanding at a faster rate than the market expected. The biggest risk event of the week remains the BOE interest rate decision on Thursday followed by Mark Carney’s speech. Carney in recent comments suggested that the “inflationary impact” of the Pound depreciation “could encourage him to vote against any further interest rate cuts”.
GBPUSD Weekly Forex Forecast – 31st Oct to 4th Nov 2016 – Neutral
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