GBP/USD Weekly Forecast: Navigating Economic Indicators Amid $1.26 Pivot Point

The GBP/USD closed the week at $1.2617, marking a slight increase of 0.14%. The week ahead is packed with events that could sway this currency pair, reflected in its technical and fundamental indicators.

• The pivot point stands at $1.2578, serving as a crucial marker for directional bias.
• Immediate resistance is observed at $1.2827, with subsequent levels at $1.2994 and $1.3142, representing potential hurdles in a bullish scenario.
• On the downside, immediate support lies at $1.2459, followed by $1.2309 and $1.2126, which could provide buying opportunities if bearish momentum intensifies.

Technical Indicators

• The Relative Strength Index (RSI) hovers around 50, indicating a neutral market sentiment.
• The 50-day Exponential Moving Average (EMA) at $1.2544 suggests a close contest between bulls and bears.
• A discernible downward trendline near $1.2825 implies resistance, whereas a breach below $1.2580 could signal a selling trend.

Economic Events Impact

• Manufacturing PMI: U.S. data (expected at 48.5) could influence market sentiment and the dollar’s strength on Monday.
• Employment Data: U.S. ADP Non-Farm Employment Change and Non-Farm Employment Change, forecasted at 149K and 205K respectively, will be significant for market dynamics on Wednesday and Friday.
• Service Sector: The U.S. ISM Services PMI, anticipated at 52.7, along with GBP’s Construction PMI at 49.8, set for release on Wednesday and Friday respectively, will provide insights into service sector health.

Conclusion

The GBP/USD pair presents a bullish outlook above the $1.2578 pivot point, requiring a break above resistance levels to confirm further upside potential.

However, economic events, particularly in the U.S., such as manufacturing and employment data, could exert considerable influence. A drop below the pivot point may signal a bearish trend.

Hence, traders should watch these key levels and indicators closely to navigate the market’s next moves effectively.