- The Sterling is holding steady above the 1.3200 level ahead of Thursday’s FOMC Minutes.
- Trade war fears are still the overarching theme of the week, and coupled with Friday’s NFP and US data drop, is likely to keep the USD out of any serious moves until then.
The GBP/USD is sticking close to 1.3230 ahead of Thursday’s London market open.
The Sterling has been recovering from a recent low of 1.3049, a new low for 2018 set last week. The pair flattened out yesterday after liquidity dried up with the US markets shuttered in celebration of Independence Day, and Thursday will see US markets back in action with US Initial Jobless Claims at 12:30 GMT (forecast 225 thousand, last 227 thousand), followed by the Markit Services PMI at 13:45 GMT (forecast 55.4, last 56.5), and ending with the FOMC’s latest Meeting Minutes at 18:00 GMT, and traders are expecting an on-balance showing from the FOMC, with a hawkish lean to the group’s minutes as the US is still on pace for further rate hikes in 2018.
The UK only sees a speech from the Bank of England’s (BoE) Governor, Mark Carney, at 10:00 GMT, but the governor is unlikely to reveal any information that will deviate from the BoE’s main narrative, and Carney is expected to keep markets looking for an August rate hike.
GBP/USD levels to watch
As noted by FXStreet’s own Haresh Menghani, “from a technical perspective, the pair retains its near-term bullish stance, especially after the recent sharp rebound from YTD lows, the 1.3050 area, set last Thursday. Hence, the ongoing momentum is likely to get extended towards 1.3275-80 intermediate resistance en-route the 1.3300 handle. A follow-through buying interest has the potential to lift the pair towards a short-term descending trend-channel resistance, currently near the 1.3335 region, where it is likely to show reluctance to extend the rally.
On the flip side, any meaningful retracement back below the 1.3200-1.3190 immediate support is likely to find some buying interest near the 1.3140-35 zone and is followed by a strong support near the 1.3100 handle. Only a decisive break below the mentioned supports might negate the positive outlook and realign the pair with bearishly trending short-term technical indicators.”
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