For GBP / USD, the past week has turned out to be ambiguous. The currency pair showed good volatility, but at the same time, the week ended unchanged. At the same time, the main driver was still the US dollar, which by and large determined the direction of price movement.
But this week the situation should change dramatically. The dollar with the absence of important macroeconomic data from the United States is likely to play a “second fiddle” while the focus of investors will be on sterling and on very important events that will occur during the week in the UK. And there really will be something to look at. Already today, the PMI services sector, which is a priority for the British economy, will become known. The indicator is expected to be at the level of 54.1 points and any data above or at the level of the forecast indicator will most likely provide significant support to the pound.
In addition, this week we are still waiting for a very important report of the Bank of England on inflation, as well as the meeting of the regulator and the decision on the interest rate. So surely the week for the currency pair will turn out to be very volatile and the direction will be determined by the data actually obtained from the above-noted events.
On the chart, we see the development of a correctional bearish wave, which is likely to receive its continuation this week, as the closest significant support level for the price at which it can stay is at 1.3950. This is the first and most probable target for reducing a currency pair. Further price movement will depend on whether the bears succeed in pushing above the indicated support or not.
Review prepared by Fort Financial Services analytical department. Follow our publications!