The GBP/USD weekly forecast is flat as investors will likely sit on their hands until inflation data comes out ahead of the central bank meetings.
This past week, investors were interested in US data, such as the producer price index and initial unemployment claims. There was also PMI data from the UK showing a contraction. The United States had a small increase in the number of new unemployment benefit claims, which shows that the labor market is still strong and tight.
In November, US producer prices rose a little more than expected. The annual inflation at the factory gate registered its smallest gain in 1-1/2 years, signaling a slowdown in the trend.
Looking at the daily chart, it is clear that the price is in a bullish trend as it is trading above the 20-SMA, and the RSI is above 50. Bulls have consistently broken above resistance levels and are trading at the 1.2300 key resistance level.
Bulls have attempted to break above this key level but have failed. The second attempt is, however, looking weaker than the first. This could mean another failure. Bulls must gather more momentum to break above the 1.2300 key resistance level. If they don’t, bears might reverse the trend.
Another sign of weakness is the fact that the price is trading close to the 20-SMA. Bears must break below the 20-SMA to reach the 1.1850 and 1.1507 support level.