Search ForexCrunch

   “¢   Weaker USD/incoming positive UK data remains supportive of the ongoing up-move.
   “¢   Carney’s upbeat comments provide an additional boost in the last hour.
   “¢   Traders now eye US economic data and FOMC meeting minutes for some fresh impetus.

After an early Asian session dip to 1.3210 level, the GBP/USD pair regained positive traction and touched a fresh 1-1/2 week high in the last hour.

The pair built on last week’s goodish recovery move from fresh YTD lows and has so far, held with a positive bias for the fourth session in the previous five. The incoming positive UK economic data, combined with the ongoing US Dollar retracement slide continued driving the pair higher and helped build on its momentum beyond the 1.3200 handle.

The positive momentum got an additional boost after the BoE Governor Mark Carney, during a scheduled speech in Newcastle, talked up inflationary expectations and also said that a tighter monetary policy is needed. Carney’s comments lifted BoE rate hike expectations for August and provided a minor lift to the British Pound.

The up-move, however, lacked any strong follow-through as investors might now wait to see the incoming UK macro data, scheduled over the course of this month, in order solidify rate hike expectations and before committing to any further appreciating move for the major.

In the meantime, today’s US economic releases – ADP report and ISM non-manufacturing PMI, along with the latest FOMC meeting minutes might also play a key role in determining the pair’s near-term trajectory.  

Technical levels to watch

Immediate resistance is pegged near the 1.3275-80 region, above which the pair is likely to surpass the 1.3300 handle and aim towards testing the 1.3335-40 supply zone.  

On the flip side, the 1.3200 handle now seems to protect the immediate downside, which if broken might drag the pair back towards 1.3140 strong horizontal support en-route the 1.3100 handle.