The British pound returned above 1.22 last week after hitting a six-month low of 1.2108, a rise supported by more upbeat data on the British economy. The latest GDP report shows the UK economy grew by 0.2% in the second quarter, maintaining its lead of 1.8% compared with the last three months of 2019, before the onset of the COVID-19 pandemic.
It is also worth noting that the Bank of England kept rates at September levels, but emphasized its intention to keep rates high for an extended period of time. Traders estimate the probability of a rate hike to 5.50% by the end of the year at 36%.
The GDP data also shows positive trends such as rising consumer spending, increasing business investment and the positive contribution of foreign trade.
GBP/USD Weekly Forecast October 2 — 6, 2023
The Pound/Dollar GBP/USD currency pair ends the trading week in a downward trend. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines downwards, which indicates pressure from sellers and a potential continuation of the fall of the British Pound against the US Dollar from current levels. At this point, we should expect an attempt to develop a rise and test the resistance area near the level of 1.2475. Next, a rebound downwards and a continuation of the fall of Pound/Dollar quotes to the area below the level of 1.1595.
An additional signal in favor of a decline in the British Pound will be a test of the resistance line on the relative strength index (RSI). The second signal will be a rebound from the lower border of the bullish channel, which was broken down by sellers. Cancellation of the option to fall the GBP/USD pair in the current trading week of October 2 — 6, 2023 will be a strong increase in quotes and a breakdown of the 1.2745 area. This will indicate a breakdown of the resistance area and continued growth to the area above the level of 1.3165. Confirmation of the fall of the GBP/USD currency will be a breakdown of the support area and closing of the price below the level of 1.2045.
GBP/USD Weekly Forecast October 2 — 6, 2023 suggests an attempt to rise and test the resistance level near the 1.2475 area. Where can we expect the currency pair to continue to fall with a target below the 1.1595 area. An additional signal in favor of a decline will be a test of the trend line on the relative strength index (RSI). Cancellation of the fall option for the Pound/Dollar pair will be a strong growth and a breakdown of the level of 1.2745. In this case, we should expect the pair to continue to rise with a potential target above the level of 1.3165.
Looking for the Best Forex Broker? We trade at RoboForex. You can receive a rebates from each trade when registering using our partner link