The past week turned to be positive for the UK pound – the pair managed to rebound from the levels below 1.3900 to the levels above 1.4100. However, the bullish move was paused by the mixed US labor market figures on Friday.
Technically, the pair is now testing the levels above 38.2% Fibonacci retracement. What’s more, you may see a clear bullish channel and an inverse “head-and-shoulders” formation on the H4 chart. We see potential for a recovery to 1.4250 on the coming week. Key support is seen at 1.4080.
UK economic calendar for the new week is rather light. Watch the UK manufacturing production figures on Wednesday. The market will mostly be driven by the Fed’s expectations – we expect them to decline gradually ahead of the coming March 16 policy meeting in the United States.