GBP/USD Weekly Price Forecast – British Pound Slams Into Support

The British pound has fallen during the course of the trading week to slice down below the 1.35 handle. The jobs number in the United States was stronger than anticipated, thereby having more people bet on the US economy. However, more importantly we had seen the Bank of England decide to punt on tapering, thereby risking a slowdown due to inflation. Ultimately, this is a market that I think continues to see the 1.34 level as crucial, and therefore I think what we should see is a big battle going on in this region. While the British pound of course got absolutely hammered, the reality is that the Friday session is starting to look more like a hammer though, so if we can break back above the 1.35 level on a daily close, that may have the weekly chart turn back around.

GBP/USD Video 08.11.21

If we break down below the 1.34 handle on the weekly close, it is very possible that we could go looking towards 1.30 level. It will be interesting to see if this happens but considering that I am writing this article after the jobs number looks so strong, I think we are trying to form a little bit of a bottom at this point, so the next couple of days will probably determine the longer-term outlook on the weekly chart as well.

That being said, the real question now is whether or not the Bank of England will decide to taper in the next few months. There is still somewhat of a thought that early next year will be when they tried to taper, and we may start pricing that in now that we have gotten through the initial shock.

For a look at all of today’s economic events, check out our economic calendar.