GBP/USD Weekly Forecast: Shifting Sentiment Amid Upbeat NFP

• Powell’s speech dashed hopes for a 50 bps rate cut in November.

• US data showed a tight labor market.

• Tensions in the Middle East have increased demand for the safe-haven dollar.

The GBP/USD weekly forecast shows a sharp shift in bearish sentiment as the greenback regains its luster.

GBP/USD Ups and Downs

GBP/USD made a solid bearish candle for the week as the dollar strengthened against the pound. It was a strong week for the greenback as data, remarks from politicians and tensions in the Middle East supported the currency.

–Interested in learning more about day trading brokers? Check out our detailed guide –

The dollar’s first catalyst was Powell’s speech, which dashed hopes for a 50 bps rate cut in November.

Meanwhile, US data showed a tight labor market, with vacancies and private employment rising more than expected. In addition, the nonfarm payrolls report revealed a stronger-than-expected increase in employment.

Elsewhere, tensions in the Middle East have increased demand for the haven dollar.

Next week’s key events for GBP/USD

Next week, market participants will focus on the FOMC minutes. The minutes could hold clues to what policymakers might do in the future. At the same time, the US CPI and PPI reports will show whether inflation is approaching the Fed’s 2% target.

Analysts believe that consumer inflation will further decrease in September from 2.5% to 2.3%. A larger-than-expected decline will put pressure on the Fed to lower borrowing costs. As a result, bets for a rate cut of 50 bank points in November would increase. On the other hand, an unexpected jump would favor a smaller rate cut.

In the UK, market participants will focus on manufacturing output and the GDP ratio. A resilient economy will lower bets on BoE rate cuts, while the opposite is true.

GBP/USD Weekly Technical Forecast: Bears Break Out of Rising Wedge Pattern

Technically, the GBP/USD price has broken out of the bullish wedge to the downside. At the same time, it broke below the 22-SMA, indicating a change in sentiment. Previously, the price made a series of higher highs and lows in a wedge pattern.

-Looking for the best AI trading brokers? Check out our detailed guide –

However, the uptrend broke when it reached the 1.3400 resistance. Here, the RSI made a bearish divergence, indicating the decline of bullish momentum. Soon after, the bears became strong enough to break out of the climb. In the coming week, the price will face the 1.3051 support level. A break below would clear the way to the 1.2701 support, reinforcing the bearish trend.

Want to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.