GBP/USD weekly forecast: Pound to Dollar outlook for August 12, 2024

Based on the technical indicators and chart patterns observed at the time of writing:

Bullish Scenario: If GBP/USD manages to stay above the support level of 1.2700 and break above the weekly pivot and Ichimoku cloud resistance near 1.2800, we could see a move towards the resistance zone at 1.3000. We might look for a confirmation of bullish momentum through a MACD crossover and RSI moving above 60.

Bearish Scenario: A break below the support level of 1.2700 could trigger further downside towards the next support levels at 1.2600 or even 1.2500. The bearish signals from the MACD and Parabolic SAR support this view. However, for a sustained bearish move, the price needs to break below the Ichimoku cloud.

Neutral/Consolidation: The current positioning of the price near key moving averages and the RSI at neutral levels suggests a potential period of consolidation. If GBP/USD remains range-bound between 1.2700 and 1.2800, traders might await a clear breakout in either direction.

This week, GBP/USD is likely to see a critical test of its current range. Traders should watch for key levels such as 1.2700 (support) and 1.2800 (resistance). A breakout from this range will provide clearer directional cues. The overall trend appears slightly bearish, but there is room for a reversal if the bulls manage to defend the support levels and push above the Ichimoku cloud.

Overview:

This week is set to be crucial for the GBP/USD pair, with several high-impact economic indicators from both the UK and the US that could drive significant volatility. The market will be paying close attention to data releases such as the UK Claimant Count Change, US Consumer Price Index (CPI), and Retail Sales figures. Traders should brace for potential swings, especially around key announcements.

Key forex events:

Tuesday, August 13:

•  7:00 AM GMT – UK claimant count change: The labour market data will be crucial for the GBP. The forecast shows a rise of 14.5K compared to the previous significant increase of 32.3K. An unexpected increase could weaken the GBP, reflecting deteriorating employment conditions.

•  1:30 PM GMT – US core poducer price index (PPI) m/m: This measure of wholesale inflation is expected to increase by 0.2%, a slowdown from the previous month’s 0.4% rise. If the data comes in higher than expected, it could support the USD by increasing speculation of future rate hikes.

 •  1:30 PM GMT – US PPI m/m: Expected to remain steady at 0.2%. Any deviation could cause market reactions as it impacts inflation expectations.

Wednesday, August 14:

 •  7:00 AM GMT – UK Consumer Price Index (CPI) y/y: CPI is expected to rise to 2.3%, up from the previous 2.0%. This uptick might bolster the GBP if it meets or exceeds expectations, as it could influence Bank of England’s monetary policy decisions.

 •  1:30 PM GMT – US Core CPI m/m: Expected to rise by 0.2%, slightly higher than the previous 0.1%.

 •  1:30 PM GMT – US CPI m/m and y/y: The annual CPI is expected to remain steady at 3.0%, with the monthly figure anticipated to increase by 0.2%. These figures are crucial as they reflect the overall inflation environment in the US, influencing the Federal Reserve’s policy outlook.

Thursday, August 15:

•  7:00 AM GMT – UK GDP m/m: The UK economy is expected to grow by 0.1%, a significant slowdown from the previous month’s 0.4% growth. This lower growth rate could put pressure on the GBP if the data disappoints.

•  1:30 PM GMT – US Core Retail Sales m/m: Retail activity, excluding autos, is expected to increase by 0.1%, down from the previous 0.4%. This data will be a key indicator of consumer spending trends in the US.

•  1:30 PM GMT – US retail sales m/m: Overall retail sales are expected to rise by 0.4%, recovering from the previous month’s stagnation (0.0%).

•  1:30 PM GMT – US unemployment claims: The number of new jobless claims is expected to rise slightly to 235K from 233K. While this is a modest increase, higher-than-expected claims could signal weakening labour market conditions, potentially weighing on the USD.

Friday, August 16:

•  7:00 AM GMT – UK Retail Sales m/m: Expected to rise by 0.6%, a robust recovery from the previous month’s -1.2% decline. This data could provide some support for the GBP if it meets or exceeds expectations.

This week is packed with critical economic data from both the UK and the US. Given the array of high-impact releases, traders should expect potential volatility, especially surrounding CPI data in both regions and the UK GDP release. Keeping an eye on the deviations from forecasts will be key for gauging the market’sreaction and adjusting positions accordingly. 

This analysis is for informational purposes only and does not constitute investment advice. Trading in financial markets involves significant risk of loss. Past performance is not indicative of future results.
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