GBP/USD: forecast for October 12-18
UK currency jumped by almost 300 pips since early October. The major reason is the weakness of the US currency and technical conditions. The cable reached our target of 1.5330. However, bearish BOE comments on Thursday paused the rally.
Cable is trading in a medium-term bearish channel formed in June. Fix above 1.5330 will open the way to our next targets at 1.5500 and 1.5580. In the current volatile market conditions, our targets could be hit in the coming days. Break above 1.5500 will confirm the trend reversal.
On Tuesday, we’ll be watching the UK inflation figures. It is expected to stay around zero. On Wednesday, we’ll be watching the labor market figures. UK employment has been showing positive dynamics as of late.
Chart 1. GBP/USD Daily
Chart 2. GBP/USD H4