This week's GBPUSD outlook remains tilted to the downside as technical signals, including a persistent lower-high structure and momentum weakness, align with a softening global macro backdrop. With the Bank of England poised to cut rates and US data reinforcing expectations of Fed easing, market volatility is likely to intensify around key event releases. Traders should keep a close watch on the outlined support and resistance zones, as breaks in either direction could set the tone for the pair's next significant move.
Overview
This week's GBPUSD outlook remains tilted to the downside as technical signals, including a persistent lower-high structure and momentum weakness, align with a softening global macro backdrop. With the Bank of England poised to cut rates and US data reinforcing expectations of Fed easing, market volatility is likely to intensify around key event releases. Traders should keep a close watch on the outlined support and resistance zones, as breaks in either direction could set the tone for the pair's next significant move.
Key Economic Events
Tuesday 17:00 (GMT+3) – USA: ISM Services PMI (USD)
Wednesday 01:45 am (GMT+3) – New Zealand: Employment Change q/q (NZD)
Thursday 14:00 (GMT+3) – UK: Official Bank Rate (GBP)
Friday 15:30 (GMT+3) – Canada: Employment Change (CAD)
Chart Analysis
Since peaking at 1.37880 on July 1, GBPUSD has sustained a clear bearish trajectory, defined by a persistent sequence of lower highs and lower lows. The early reversal signal emerged with the formation of a Hanging Man candlestick, followed by a Spinning Top, both indicating exhaustion in the prior uptrend.
Bearish momentum strengthened after a failure swing pattern, as the recovery attempt stalled at 1.35878—below the preceding high—before decisively breaking the key support at 1.33646. This breakdown firmly shifted market bias to the downside, a move further validated by a “Death Cross,” with the 20-period EMA crossing below the 50-period EMA, confirming the acceleration of downward pressure.
Technical readings continue to reinforce the bearish outlook. The Momentum Oscillator remains below the 100 mark, signaling ongoing weakness, while the RSI stays under the 50 level, highlighting persistent selling pressure in the pair.
Key Resistance Levels
Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:
1.33644: The initial resistance level is established at 1.33644, which mirrors the swing low from July 16.
1.34430: The second price target is set at 1.34430, representing the weekly resistance, R1, estimated using the standard Pivot Points methodology.
1.35878: The third price objective is observed at 1.35878, corresponding to the swing high registered on July 24.
1.37880: An additional upside target is projected at 1.37880, reflecting the daily high recorded on July 1.
Key Support Levels
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.31407: The initial support level is seen at 1.31407, corresponding to the daily low reached on August 1.
1.30029: The second support level is estimated at 1.30029, representing the 261.8% Fibonacci Extension drawn from 1.33644 to 1.35878.
1.28208: The third support level is identified at 1.28208, reflecting the weekly support, S3, calculated using the standard Pivot Points methodology.
1.26415: An additional downside target is 1.26415, mirroring the 423.6% Fibonacci Extension drawn from 1.33644 to 1.35878..
Fundamentals
The July jobs report showed US nonfarm payrolls rising by just 73,000, well below expectations, with sharp downward revisions to prior months. The three-month average job gain has slowed to 35,000, pointing to a significant cooling in the labor market and broader economy. Economists cite slower consumer spending, higher tariffs, and weaker income growth as key headwinds, with some warning that recession risks have risen. GDP grew at 3% in Q2, but averaged only 1.2% for the first half of the year, suggesting momentum is slowing. Markets now see a high probability of a Federal Reserve rate cut in September, though officials have so far signaled caution.
On the other hand, the Bank of England is expected to cut its main interest rate by 0.25% to 4% on Thursday, as the UK economy struggles with slower growth and weaker hiring. Recent tax increases, higher wages, and cautious consumers have put pressure on businesses, leading to job losses and reduced demand for workers.
Although inflation is at its highest level in 17 months, Bank of England Governor Andrew Bailey believes the jump in prices will be temporary and is focusing on supporting the economy after two quarters of falling GDP.
Alongside the rate decision, the Bank will release new forecasts and may signal how it plans to handle its large stockpile of government bonds, known as quantitative tightening, in the months ahead. Markets will be watching closely for hints on whether more cuts are coming later this year.
Conclusion
A string of high-impact economic events across major economies drives this week's trading landscape. Markets are closely watching US service sector data, employment figures from Canada and New Zealand, and a pivotal interest rate decision from the Bank of England. Each release carries the potential to sway currency markets and shape sentiment. In this update, we focus on GBPUSD, where bearish signals dominate the technical picture, and traders are monitoring key support and resistance levels for clues on the next big move.