GBP/USD: outllok for September 26-30
It was another bearish week for GBP/USD. Although the recent data shows that UK economy has been doing better than expected after Brexit vote, the uncertainty for Britain is not over. Foreign secretary Boris Johnson said that the UK government is likely to begin the process of the country’s formal departure from the EU early next year. This means that there are more challenged ahead for British economy. As a result, British pound will likely remain under pressure.
The recent correction of sterling to the upside made the short positions decline, and the market is once again ready to sell the pound. In addition, the market still expects the Bank of England to cut its benchmark interest rate in November.
Resistance is provided by the 1.3100/50 area (bottom of the daily Ichimoku Cloud). Downside targets lie at 1.2885 and 1.2770/50. Technical picture will become positive only above 1.3400/3500.
Britain’s economic calendar for the next week is rather light. The nation will release net lending to individuals figures on Thursday and current account and final Q2 GDP on Friday.