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GBP/USD Weekly Outlook

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GBP/USD’s recovery from 1.2762 extended last week but upside was limited below 1.3035 resistance so far. Initial bias remain neutral this week and further decline is still expected. Break of 1.2762 will resume the fall from 1.3482 to 38.2% retracement of 1.1409 to 1.3482 at 1.2690. Decisive break there will argue that the rise from 1.1409 might be completed, and bring deeper fall to 61.8% retracement at 1.2201. Though, break of 1.3035 will suggest that decline from 1.3482 is merely a corrective move, and turn bias back to the upside for retesting 1.3482.

GBP/USD Weekly Outlook

In the bigger picture, while the rebound from 1.1409 was strong, it’s limited by both 1.3514 resistance, as well as 55 month EMA (now at 1.3317). The development keeps outlook bearish. Sustained break of 55 week EMA (now at 1.2719) will add to medium term bearishness for a new low below 1.1409 at a later stage, resuming the down trend from 2.1161 (2007 high).

GBP/USD Weekly Outlook

In the longer term picture, GBP/USD is staying below decade long trend line from 2.1161 (2007 high). It also struggles to sustain above 55 month EMA (now at 1.3317). Long term outlook stays bearish for now, despite bullish convergence condition in monthly MACD.

GBP/USD Weekly OutlookGBP/USD Weekly Outlook

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Developments surrounding the coronavirus saga will continue to play a key role in driving the broader market risk sentiment. This coupled with a scheduled speech by the Fed Chair Jerome Powell will influence the USD price dynamics and produce some short-term trading opportunities.
The risk-off mood benefitted the safe-haven USD and contributed to the selling bias.

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