GBP/USD: weekly prospects
GBP/USD trade remained volatile on the past week. On Tuesday the cable dipped on weak CPI, but found support at 1.4800. Bad US figures rendered some support for the pair later in the week. The upside was limited by 1.5000, however. The overall tone of the BOE comments was rather optimistic: they expect deflation to be short-lived and promise rates to be raised one day. However, the degree of uncertainty still remains very high.
As can be seen from the daily chart, the pair keeps on forming a horizontal triangle that will likely be broken to the downside. The 1.4800 mark is now crucial – triangle support and the 2013 lows. Break below would become a strong selling signal. We remain bearish below 1.5000.
On the new week watch the UK current account and final GDP on Tuesday. On Wednesday and Thursday we’ll see fresh PMI indices. British banks are closed on Friday, while US is scheduled to release Non-farm payrolls – beware the volatility risks.