GBPUSD ENTERS BEAR MARKET; ASIAN SESSION BULLISH RETRACEMENT EXPECTED

FUNDAMENTAL BEAM

GBP/USD continues to move higher and broke through the 1.61 line this week. The pair closed the week at 1.6136. This week’s key events are Manufacturing, Services and Construction PMIs. Here is an outlook of the events and an updated technical analysis for GBP/USD.
The pound continues to shine, although this week’s UK numbers were uneventful. In the US, Unemployment Claims looked sharp, but key manufacturing and housing data disappointed the markets and weighed on the greenback.

1. Net Lending to Individuals: Monday, 8:30. An increase in lending reflects stronger consumer confidence and spending. The July reading dropped to 1.5 billion pounds, falling short of the estimate of 1.7 billion. The estimate for August stands at 1.6 billion.
2. Manufacturing PMI: Tuesday, 8:30. This PMI has been steadily rising and the index has been above the 50-point level, indicating expansion, for the past four releases. Little change is expected in the upcoming release, with an estimate of 57.5 points.
3. Halifax HPI: Wednesday, 2nd-4th. This housing inflation indicator provides a snapshot of the health of the UK housing sector. The index dropped to 0.4% in July, falling short of the estimate of 0.7%. The forecast for the August release stands at 0.6%.
4. Construction PMI: Wednesday, 8:30. Construction PMI has been on a steady upward rise, and hit 59.1 points in the August reading. The markets expect the rise to continue, with an estimate of 60.1 points.
5. Services PMI: Thursday, 8:30. This index continues to look sharp, and has been above the 60-point line for the past three readings. The markets are not expecting much change in the September release, with an estimate of 60.4 points.
6. 10-y Bond Auction: Thursday, Tentative. British 10-year bond yields have been rising, and the previous average yield came in at 2.98%. If this week’s auction produces an average yield above 3.0%, it will be the first time we’ve seen this in over two years.

TECHNICAL BEAM

Just as for prected for EURUSD, we also expeect a similar move for GBPUSD. An upside move to 1.6128 before strongly starting its bearish move south-east of the chart. we expect price to drop to 1.5767 with a possible retracement back to 1.5984 before completing its wave B leg at 1.5315.]

NOTE: Price predictions produced by FibonacciPrice&PatternTrader may be affected by unforseen events like hurricane, earth quake, flood and other natural disasters consequently changing price patterns already predicted. Hence we advice strict adherence to money management techniques.

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