GBP/USD Gains Momentum Above 1.2650, US Data in Focus
15 Jun 2023
GBP/USD turns neutral above 1.2650, with attention to US data.
During European trading hours, the GBP/USD currency pair is gaining ground above 1.2650. Returning to its highest point since late April 2022, the pair is moving back towards 1.2699. Following the spike that was sparked by the hawkish Fed pause, the US Dollar retreated amid profit-taking. US data are being watched.
After reaching its highest point since April 2022 at 1.2700 on Wednesday, the GBP/USD currency pair lost momentum and fell towards 1.2650 early on Thursday. Although the technical view indicates that the positive bias is still present, it may be challenging for the pair to continue its upward movement if the market’s sentiment deteriorates in the afternoon.
Following the June policy meeting, the Federal Reserve (Fed) did as predict and maintained the policy rate in the range of 5-5.25%. However, the updated Summary of Projections (SEP), sometimes known as the “dot plot,” showed that most policymakers anticipate the Fed raising the policy rate by 25 basis points (bps) twice more this year.
After the Fed event, the US Dollar Index reversed a significant percentage of its weekly losses, demonstrating the favorable effect of the hawkish dot plot on the US Dollar’s (USD) valuation.
Market investors will be closely monitoring the US’s weekly initial jobless claims and May retail sales data during the second half of the day. If fewer than 30,000 people apply for unemployment benefits, the USD may continue to strengthen, pushing the GBP/USD rate lower and vice versa.
Markets are presently pricing in a 72% probability of a 25-basis point Fed rate increase in July, according to the CME Group Fed Watch Tool, which suggests that the USD has more upside potential if hawkish Fed bets dominate market activity.
US stock index futures are now declining in the European session by 0.1% to 0.5%. The USD could beat risk-averse competitors like the pound sterling thanks to a dismal start on Wall Street and a significant drop in the major market indices.
GBP/USD TECHNICAL ANALYSIS DAILY CHART:
- GBP/USD is trading in the up channel.
- GBP/USD currently trading above all SMA.
- RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
- GBP/USD resistance is at 1.26954 & its immediate support level is 1.26291
HOW TO TRADE GBP/USD
GBP/USD is trading higher, Around the area of recent resistance. Following a correction, the price began to rise once more, and it is currently trading at a significant resistance level; if this level is broken, a further rise is expected.