GBP/USD weekly forecast: Pound to Dollar outlook for this week August 19, 2024

GBP/USD overview:

The GBP/USD currency pair begins this week with mixed sentiment as traders focus on both key economic data releases. The current price at the time of writing is 1.2945. Last week saw the pair consolidating within a tight range, reflecting market indecision. With a packed economic calendar, this week could be pivotal in determining the pair’s next significant move.    

1.  Ichimoku Cloud: The price is currently trading near the upper boundary of the Ichimoku Cloud at 1.2945. Typically, this indicates that the market is in a state of indecision. If the price can break above the cloud and sustain levels above 1.3000, it could signal a potential bullish breakout. However, if the price fails to breach this resistance, a reversal toward the lower cloud boundary around 1.2900 could occur.

2.  Moving Averages (MA):

     •  The 20-day MA is near 1.2920, while the 50-day MA is around 1.2950. This proximity of the shorter-term MAs indicates a range-bound market.

     •  The 100-day MA is near 1.3000, acting as a significant resistance level.

     •  The 200-day MA at 1.3070 suggests that the long-term trend remains upward, but it faces strong resistance around this area.

3.  MACD Indicator: The MACD line is slightly above the signal line but remains near the zero level. This reflects weak bullish momentum and indicates that the market could easily reverse based on fundamental data.

4.  RSI Indicator: The RSI is at 52, which is a neutral level, reinforcing the idea that the market is in a state of balance without strong directional bias. This suggests that traders are waiting for a catalyst before committing to either buying or selling.

Key Support and Resistance Levels:

•  Immediate Resistance: 1.3000 (Key psychological level and 200-day MA)

•  Secondary Resistance: 1.3070 (Previous swing high)

•  Immediate Support: 1.2900 (Weekly pivot and cloud base)

•  Secondary Support: 1.2800 (Major support from earlier consolidations)

1.  Wednesday, August 21:

FOMC Meeting Minutes (USD): The release of these minutes is crucial as they could provide insights into the Fed’s future rate hike plans. A dovish tone may weaken the USD, pushing GBP/USD higher.

2.  Thursday, August 22:

UK Flash Manufacturing & Services PMI (GBP): The UK economy’s performance is under scrutiny, and weak PMI numbers could increase downward pressure on GBP/USD.

 US Unemployment Claims and Flash PMIs: Strong U.S. data could strengthen the USD, leading to a bearish move in the pair.

3.  Friday, August 23:

Jackson Hole Symposium & Fed Chair Powell Speech (All Currencies): The symposium could be a game-changer if Powell hints at any shifts in monetary policy. This is a key event that could introduce substantial volatility.

4.  Saturday, August 24:

BOE Governor Bailey Speech (GBP): Should Governor Bailey signal further tightening due to persistent inflation, the pound could gain strength, pushing GBP/USD higher.

Bullish Scenario: If the UK’s PMI data shows resilience and the FOMC minutes suggest caution regarding further rate hikes, GBP/USD could rally above the 1.3000 resistance level. A successful break could open the door for a move toward 1.3070, where the 200-day MA provides additional resistance.

Bearish Scenario: If UK PMI figures disappoint and the Fed strikes a hawkish tone, GBP/USD could dip below 1.2900, potentially targeting the 1.2800 level. This would indicate that bears are regaining control, especially if USD demand remains strong.

Neutral Scenario: Given the current price near 1.2945 and the balance seen in both RSI and MACD indicators, a neutral scenario is highly plausible. The pair is likely to remain range-bound between 1.2900 and 1.3000, with no clear trend emerging unless significant data surprises occur. In this environment, range-bound strategies could prove effective, buying near 1.2900 and selling near 1.3000.

Likely Trading Range for the Week: 1.2900 to 1.3000 Extended Range (in case of strong fundamental drivers): 1.2800 to 1.3070

This week’s trading for GBP/USD will be shaped by a mix of technical factors and fundamental events, with a primary focus on the FOMC minutes and the Jackson Hole Symposium. The current technical setup suggests that the pair is in a neutral to slightly bullish stance, but decisive moves will depend on how the data and central bank speeches align with market expectations.

Traders should be prepared for volatility spikes, particularly around the release of PMI data and key speeches. In the absence of major surprises, the pair is likely to trade within the 1.2900 to 1.3000 range, providing opportunities for both range-bound and breakout strategies depending on how the week unfolds.

This analysis is for informational purposes only and does not constitute investment advice. Trading in financial markets involve significant risk of loss. Past performance is not indicative of future
results. Please seek independent financial advice before making any investment decisions. Full Disclaimer