- GBP/USD looks to end the second day in a row with gains.
- US Dollar Index steadies below 94.50.
- The service sector in the UK shows health activity in June.
The subdued trading action on Thursday didn’t allow the GBP/USD pair to make sharp fluctuations and the pair now seems to be moving sideways above the 1.32 mark with American traders enjoying the Independence Day holiday. As of writing, the pair was trading at 1.3216, adding 0.15% on the day.
Earlier today, the monthly report released by Markit showed that the business activity in the UK expanded at a faster pace than expected with the PMI data improving to 55.1 in June from 54 in May.
On the other hand, the greenback failed to make a meaningful recovery after recording losses on Tuesday and the US Dollar Index was virtually unchanged on the day near 94.35 as of writing.
On Thursday, the BoE Governor Mark Carney will be delivering a speech. Later in the day, the private sector employment data released by ADP and Markit service sector PMI figures from the United States will be followed closely by the participants. Moreover, the FOMC is going to publish the minutes of its June meeting.
“There are several downside risks on the horizon, including slowing global growth, emerging market volatility, and trade wars,” said Michael Hanson, Head of Global Macro Strategy at TD Securities, in a recently published report and added:
“We expect a data-dependent Fed to look past these external shocks unless they clearly spillover into the US data, as conditions are less fragile and policy normalization is further along than in 2015-2016.”
Technical levels to consider
The immediate resistance for the pair aligns at 1.3230 (daily high/20-DMA) ahead of 1.3300 (psychological level) and 1.3350 (50-DMA). On the downside, supports could be seen at 1.3170 (daily low), 1.3095 (Jul. 2 low) and 1.3045 (Jun. 28 low).
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