Cable remains in a downtrend ahead of series of UK economic data next week

GBPUSD was in a downward trajectory during this week, pressured by stronger dollar on prospects that inflation in the US may stay elevated, which would prompt Fed for further tightening, as the central bank’s latest comments were more hawkish than expected.

In addition, UK GDP was flat in the third quarter, confirming that the economy is stagnating, though with some positive signals that falling into recession was avoided this time.

Market shift focus on a number of economic data from the UK next week – labor market report on Tuesday, CPI on Wednesday and retail sales on Friday, which will have strong influence on pound’s performance as well as on BOE’s monetary policy outlook.

Daily chart shows increasingly bearish outlook after last week’s recovery stalled under 200 DMA and failed to sustain penetration into falling thick daily cloud, which tracked this week’s descend and maintained pressure on sterling.

The pair is on track for the biggest weekly loss since the third week of July, with Friday’s close below cracked Fibo support at 1.2206 (61.8% retracement of 1.2069/1.2428) with weekly close below these supports to confirm bearish signal.

Near-term bias is expected to stay firmly with bears as long as price action is capped by the base of falling daily cloud.

Res: 1.2239; 1.2262; 1.2291; 1.2301
Sup: 1.2154; 1.2095; 1.2069; 1.2037