• The GBP/USD weekly forecast suggests further downside.

• The US economy grew by 3.0%, compared to the forecast of 2.5%.

• The dollar retreated on Friday after data revealed slower-than-expected job growth in July.

The GBP/USD weekly forecast suggests further downside as market participants prepare for a Bank of England rate cut.

Ups and downs of GBP/USD 

The GBP/USD price had a bearish week as the dollar strengthened on upbeat data and higher tariffs. However, there was a pullback after the nonfarm payrolls report. 

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At the start of the week, data revealed solid private employment. At the same time, the economy grew by 3.0%, compared to the forecast of 2.5%. The data boosted the dollar. Moreover, Trump imposed higher tariffs on several countries, which sent Treasury yields and the dollar higher. 

However, the dollar retreated on Friday after data revealed slower-than-expected job growth in July.

Next week’s key events for GBP/USD

Next week’s calendar for GBP/USD is quite light. Market participants will focus on the Bank of England policy meeting, where the central bank might cut interest rates by 25-bps. The pound had a bad month in July as traders worried about the state of the UK economy. 

Despite being among the first countries to sign a trade deal with the US, the UK’s currency has suffered amid poor economic data. The weak reports have led to an increase in expectations for Bank of England rate cuts.

GBP/USD weekly technical forecast: Lower low confirms new downtrend

On the technical side, the GBP/USD price trades well below the 22-SMA, showing bears are in the lead. At the same time, the RSI trades below 50, indicating solid bearish momentum. At the same time, the price recently broke below the 1.3402 support level to form a lower low. This confirms a bearish trend. 

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Previously, the price was in a bullish trend that paused near the 1.3803 key level. Bears took charge by breaking below the 22-SMA and respecting it as resistance. The bearish bias is strong, especially since the price has confirmed a new downtrend. 

Currently, the price has paused after making a lower low. It might pull back to retest the recently broken 1.3402 level before dropping to fresh lows. The next target for GBP/USD is at the 1.3001 key support level. A break below will strengthen the bearish bias.

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