GBPUSD Weekly Forex Forecast – 3rd to 7th Oct 2016

The GBP/USD technical pattern remains bearish as long as we’re trading below the trendline drawn from the September’s highs. The bearish case favors a break below the 1.2868 support level and last swing low, but because the Stochastic indicator is in oversold conditions this can be a false breakout and a retest of the downward TL or even a break and retest of the 1.3000 big psychological number can be expected.

Even though the sentiment remains heavily skewed against the British Pound we can’t rule out frequent rallies that can be quickly sold off. We’re still trading inside a wide range so this is a plausible scenario.

The UK economic calendar will bring in the spotlight the Markit Manufacturing PMI figures scheduled to be released on Monday. After surging to ten-month highs the manufacturing activity is expected to cool off and the consensus is for a reading of 52.1 down from 53.3. However, the major risk event of the week remains the US NFP report, which is expected to boost volatility.The market consensus is for another strong figure in the US job report. The NFP numbers are expected at 180k, up from the previous reading of only 151k.

Stochastic is at oversold level and is looking to head up. Of course, for any bullish move to happen, the downtrend line has to be broken. We also noticed a bullish divergence on the Stochastic Indicator and that is probably giving us the strongest indication that this bear charge down south might be coming to an end this week. Price will likely test support this week and support looks like to hold and reject any bear advancement. Good luck this coming week!

GBPUSD Weekly Forex Forecast – 3rd Oct to 7th Oct 2016 – BULLISH