Weekly Technical Outlook: GBP/USD; Market Forecasts for August 8th – August 12th

• Resistance level 1.32156
• Pivot Level 1.31778
• Support Level 1.28726, 1.27827, and 1.27619

Technical Analysis

Daily bias in GBP/USD remains bearish with 1.32156 resistances intact. A deeper decline is still expected of the pair as long as resistances hold the area. The price action stays below resistances so far at this point, and such a decline is viewed as a correction. Thus, we’d expect the resistance to hold the area, and pair remains bearish with the week’s closing indicating bearish reversal taking place.

Outlook is to continue with the downside bias price action signaling a two bar reversal bearish movement. Rejection at resistance area closed below the trend line and stochastic oscillator is currently at 50.0 levels. The pair closes below the rejection of trend line and there is clear indication of trend reversal shifting the momentum.

Current developments suggest that the medium term downside is expected for a further low and focus shall be at 1.28726. A break here should make lower lows at 1.27827 levels.

Economic

• Manufacturing Production, NIESR GDP Estimate
• RICS Housing Price Balance.
• Labor Market Conditions Index, EIA Crude Oil Stocks change, 10-Year Note Auction
• Monthly Budget Statement, Continuing Jobless Claims, Import Price Index, Initial Jobless Claims
• Retail Sales, Reuters/Michigan Consumer Sentiment Index

Area of Interest

• Strong resistance at 1.32156 area and closed below resistance levels.
• Bearish reversal strongly closing below the rejection of trend line with two bar signal.
• Price action closed below trend line and oscillator below 51.0 levels indicating shift in momentum.
• At Flip Area on Daily time frame resistance levels.

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