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GBP/USD Price Forecast: Events Affecting Markets in the Upcoming Week

GBP/USD Price Forecast: Events Affecting Markets in the Upcoming Week

Market’s week ahead Overview, Key data releases, and GBP/USD technical analysis.

Key Data Releases in the Week ahead

On Monday, October 19, markets expect the Chinese (GDP for Q3 and Retail Sales of September) with the Japanese Balance of trade of September, then traders will tune in multiple speeches of the ECB president Lagarde’s and vice president Guindos, with the Fed Chairman Powell and Fed members Williams, Clarida, Bostic and Harker.

On Tuesday, October 20, investors will find out about the Chinses house price index of September then-Fed members Quarles and Evans will deliver their speeches, respectively.

On Wednesday, October 21, markets will follow the UK inflation numbers of September, then the ECB president and Vice president speeches, then the Canadian inflation numbers of September with the Retail sales numbers of August. On the same day, Fed members Brainard and Mester will speak then oil traders will find out about the change in the US oil stockpiles.

On Thursday, October 22, investors will tune in the Bank of England governor Baily’s speech, then will find out about the US initial jobless claims and the Eurozone consumer confidence index for October. Later on, the Fed member Barkin will speak.

On Friday, October 23, markets check the Japanese inflation rates of September, the UK Retail Sales figures, with the flash PMI numbers of Australia, the Eurozone, the UK, and the US.

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GBP/USD Daily Price Chart (June 8 – October 18, 2020 )

Chart Source: Webtrader, Capex.com

On October 11. GBP/USD could to the downside and closed below the 50-day moving average indicating that bulls were losing momentum. Alongside that, the price returned to a lower trading zone 1.2773- 1.3048 eying a test of the low end of it.

A close below the low end of the zone located at 1,2773 generates a bearish signal and could send the price towards the monthly support at 1.2505.

On the flip side, a failure in closing below the low end of the zone could reverse the pair’s direction towards the high end of the zone residing at 1.3048. A further close above that level could send the price even higher towards 1.3484.

GBP/USD Four Hour Price Chart ( August 18 - October 18, 2020 )

Chart Source: Webtrader, Capex.com

On October 15, GBP/USD rebounded from the bullish trendline support originating from October 1 low at 1.2818. On the following day, the price failed on multiple occasions in closing below the trendline highlighting bear’s hesitation.

In conclusion, a violation of the aforementioned trendline could change the current neutral move to and a break below 1.2862 could encourage bears to press towards the low end of the discussed trading zone on the daily chart ie,1.2773. While a break above the October 12 high at 1.3081 may resume bullish price action towards the weekly resistance level at 1.3175. As such, the support and resistance levels underlined on the chart should be considered.

This information/research prepared by Mahmoud Alkudsi does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk. The research provided does not constitute the views of JME Financial Services (Pty)Ltd nor is it an invitation to invest with JME Financial Services (Pty)Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the research analyst and his/her spouse and/or relatives who are financially dependent on the research analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst in not employed by JME Financial Services (Pty)Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation or particular financial needs before making a commitment to invest. The laws of the Republic of South Africa shall govern any claim relating to or arising from the contents of the information/ research provided.