GBP/USD - weekly forecast

GBP Weekly key events - April 28-May 02

TUESDAY - Prelim GDP Q/Q

THURSDAY - Manufacturing PMI

FRIDAY - Construction PMI

Traders will eye tomorrow's report on prelim GDP on a quarterly basis. Despite the floods, it appears the UK economy accelerated from the Q4 pace of 0.7%. The consensus expects 0.9%-1.0%. The manufacturing and construction PMIs at the end of the week are expected to show an economy stabilizing at robust levels.

Technical view-

Weekly basis (April 28- May 02)

The cable is trading at 1.6784 in Asia's trading session. As of now, it is in sell mode. The pair has been in a strong uptrend from 1.6465 levels, but unable to sustain at higher levels. The RSI in the weekly charts indicates limited upside. If a day close above the 1.6823 level, it indicates the first sign of bullishness in the near term, aiming for 1.69, 1.6911 and 1.70 levels. We expect it will top out for the near term and will be in correction for a couple of weeks. In the last's week trading sessions the pair was unable to cross the previous high at 1.6843, it just made a high at 1.6839 and just close at 1.68 levels. Currently it is trading below the 1.68 level.

To continue its upswing the pair must trade above or close above 1.68 levels. On the higher levels, it will face rough road at 1.6823 and 1.6843 levels. Once it crosses these levels, safe traders can buy for 1.6911 and 1.70 levels. On the down side, the pair has strong support at 1.676 and 1.666. Sellers can enter short positions below 1.6760 for 1.6720 and 1.666 as weekly targets.

Weekly positional recommendations-

Sell below 1.676 for targets 1.6710 and 1.666.

Buy above 1.6843 for targets 1.6911 and 1.70.

In the daily chart, the RSI gives an early warning of support broken indication, aiming for downside target at 1.667-1.666 levels. For the last 8 trading days, the pair has been trading in a range between 1.6843-1.6763 levels. Either side breakout will create a room for further way up/down.

Intraday-

The pair is trading below 50SMA in the H4 chart, which indicates weakness. It is making a lower low and a lower high. For intraday perspective, sellers can enter below 1.6760 levels for targets 1.6720 and 1.67 immediately and 1.666 later. Today we can expect the pair will pull back to a bit higher up to 1.68 and 1.6810 levels. Sell on rise is the best strategy for this week. On the up side, the pair has a rough road at 1.68, 1.6810, 1.6820, 1.6832 and 1.6845 levels. Safe traders can buy only above 1.6845 levels for targets at 1.6875, 1.69 and 1.6911 in this week.