GBP/USD forecast price next week

The pair has been under pressure from the bears and the waning of the dollar strength has had little impact

The GBPUSD bulls seem to have lost momentum over the last week and it appears as though they are likely to have a tough time in the weeks ahead. It was a volatile weak with the dollar strength waxing and waning during the course of the week and though many of the other dollar related pairs managed to recover towards the end of the week, the pound has failed to do so and this raises the possibility of further losses in the coming week.

The dollar began the week on a positive note which placed the pair under pressure immediately. There was not much relief for the pair during the week as the new Fed Chief Powell sounded hawkish about the US economy and also on the future rate hikes as well. This helped the pound to move lower and it broke through the strong support region around the 1.38 (and 1.39) price region and with the loss of this support, the bears were in control of the pair.

Comment:

This was proved later in the week when the weakness in the dollar, brought about by the decision of the US administration to impose tariffs on import of steel and aluminium, did not have much of an impact on the pair and the pair continued to trade below the 1.38 towards the end of the week. The speeches from Carney and May failed to lift the pound and this opens it to the risk of further correction.

Looking ahead to the coming week, we have a slew of data from the US which includes the NFP and the ADP employment data. The market has already almost fully priced in a rate hike from the Fed in March and a strong piece of data would continue the trend of strong data from the US and would also open the possibility of accelerated rate hikes in the coming months. The market hopes that there would be 4 rate hikes during the year and if the incoming data continues to be strong, then this would become a real possibility and would be positive for the dollar.