Fundamental Overview
The USD has been overall rangebound in the last couple of weeks. The last week’s strength might have been influenced more by quarter-end flows rather than something fundamental as the economic data didn’t change interest rates expectations.
All else being equal, the data should continue to support the risk sentiment amid a pickup in growth without inflationary pressures, which could be a headwind for the greenback.
The GBP, on the other hand, has been under pressure since the BoE policy decision but overall it’s been more of a strong US Dollar story. This week the greenback seems to be losing ground as a new month started. This weakness might extend further, so it will be interesting to see how the price action evolves in the next days.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD eventually bounced from the support at 1.2635. That’s where the buyers stepped in with a defined risk below the level to position for a rally into the 1.28 handle. The sellers will want to see the price breaking below the 1.2635 support to get back control and increase the bearish bets into the 1.25 handle next.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have formed a range between the 1.2635 support and the 1.27 resistance. The buyers will want to see the price breaking higher to increase the bullish bets into the 1.28 handle next. The sellers, on the other hand, will likely lean on the resistance to position for a drop back into the support targeting a break below it.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have an interesting zone around the 1.2670 level where the price reacted to several times in the past weeks. This level can act as kind of a barometer for the sentiment with the price staying above it being more bullish and below it being more bearish. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US ADP, the US Jobless Claims, the US ISM Services PMI and the FOMC Meeting Minutes. Tomorrow is going to be a US Holiday for Independence Day and we will also have the UK General Election. Finally, on Friday, we conclude the week with the US NFP report.