The GBP/USD technical pattern looks very constructive for more downside pressure as we’re moving inside a well-defined downside channel or a bearish flag formation. The post-Brexit price action can be characterized by sharp rallies interrupted by successive lower lows that are encouraging the bearish view. The GBP/USD exchange rate was also altered by the BOE easing measures that in the short-term will continue to be the catalyst for more sustained bearish momentum.
The weekly close below 1.3000 big psychological level puts back in the spotlight the 1.2800 support level, while a break below the July low will open up the door for a possible retest of the lower downside channel border at 1.2200 a level that can be seen in the coming months. The 1.2800 is a significant major support level because is a fresh 30-year low the lowest level since 1985.
The UK inflation data scheduled on Tuesday 16 August can be the catalyst for some GBP/USD volatility disruption. The presumptive Brexit spillover effects on the local economy have yet to materialize as the Consumer Price index (CPI) rose by 0.5% in June, up from 0.3% in May. The market consensus is for a flat reading of 0.5% in inflation figures, but because of the rebound in commodity prices the majority of Wall Street analysts see inflation reaching the 2% BOE target by the end of 2017
GBPUSD Weekly Forex Forecast – BEARISH
