Volatility set to continue, eyes on UK bond market, inflation
Last week was another dramatic week for GBP/USD, as speculations over the UK monetary and fiscal policies kept GBP bulls afloat despite red-hot US inflation and steeper Fed rate hike bets. Cable recovered swiftly from two-week lows of 1.0923 to settle the week roughly 400 pips higher before retracing a part of its weekly rally ahead of the weekend. Looking forward, all eyes will remain on the UK bond market action and fiscal policy announcements, which overshadow the UK inflation release. In this article, we’ll detail GBP/USD Weekly Technical Forecast for Week 42, 2022.
GBP/USD technical outlook
Despite Friday’s decline, GBP/USD managed to hold above the 20-day SMA. Additionally, the Relative Strength Index (RSI) indicator on the daily chart retreated to 50, suggesting that the pair has lost its bullish momentum and turned neutral in the short term.
On the downside, 1.1050 (Fibonacci 23.6% retracement level of the latest downtrend) aligns as key support ahead of 1.1000 (psychological level, 20-day SMA) and 1.0900 (static level, psychological level). Resistances are located at 1.1300 (Fibonacci 38.2% retracement), 1.1460 (Fibonacci 50% retracement) and 1.1500 (psychological level, 50-day SMA).
GBP/USD sentiment poll
The majority of experts polled by Instaforex Nigeria see GBP/USD staying neutral next week. The one-month outlook, however, points to a significant bearish shift with the average target sitting slightly above 1.0900.
Follow the 3 simple steps below to start trading and making great profits from the Forex market:
- Open a live account with Instaforex Nigeria.
- Deposit Funds Into your account with as little as $10.
- Download our Metatrader 4 and start trading.
You can also CONTACT US if you encounter any problems while opening your live account or depositing funds into your account.
Disclaimer: All investments and trading in the stock market involve risk and is a personal decision. This article from Instaforex Nigeria is only meant to create and increase awareness about Forex trading.