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Highlights
- The GBP to USD had a bullish start to the Thursday session, with the bulls eying a return to $1.30.
- However, it is a quiet day ahead for the GBP to USD, with no economic indicators to influence.
- Later today, the US economic calendar will move the dial. Jobless claims and the Philly Fed Manufacturing Index will be in focus.
It is a quiet day ahead for the GBP to USD. There are no UK economic indicators to influence investor sentiment toward BoE monetary policy and the economic outlook.
Despite the GBP to USD tumbling to sub-$1.30 in response to the UK CPI Report, the BoE remains on course for an August 3 rate hike. However, there is uncertainty over the size of an August move and whether the BoE will push interest rates beyond 6% before hitting the brakes.
The GBP to USD found support this morning, with investors sticking to their bets on an August hike. However, sentiment could change tomorrow should retail sales unexpectedly fall in June.
With no economic indicators to consider and the UK inflation numbers easing pressure on the BoE, investors should monitor Bank of England chatter. However, no Monetary Policy Committee members are on the calendar to speak today, leaving comments to the media to influence.
The US Session
US jobless claims and the Philly Fed Manufacturing Index will move the dial. However, with the US manufacturing sector contracting for the eighth consecutive month in June, according to the ISM survey, the jobless claims will likely have more impact.
Upbeat numbers would support the theory of a soft landing. However, tighter labor market conditions would also pressure wage growth. Increasing demand for goods and services would push the prices for goods and services higher.
GBP to USD Price Action
Daily Chart
The Daily Chart showed the GBP to USD sat below the $1.30 psychological resistance level. Looking at the EMAs, the GBP to USD remained above the 50-day ($1.27107) and 200-day ($1.24012) EMAs, signaling bullish momentum over the near and long term.
Notably, the 50-day EMA continued to pull away from the 200-day EMA and reflected a bullish trend.
Looking at the 14-Daily RSI, the 59.96 reading sent bullish price signals, which aligned with the 50-day and 200-day EMAs. A GBP to USD return to $1.30 would give the bulls a run at $1.31 to bring the lower level of the $1.3195 – $1.3255 resistance band into view. The GBP to USD would need to avoid a fall to sub-$1.29 and the $1.2862 – $1.2785 support band to support a bullish session.
4-Hourly Chart
Looking at the 4-Hourly Chart, the GBP to USD sits below the $1.30 psychological resistance level. After the bearish Wednesday session, the GBP to USD continues to sit below the $1.3195 – $1.3255 resistance band.
The GBP to USD also remains below the 50-day ($1.29719) while holding above 200-day ($1.27760) EMAs, sending bearish near-term but bullish longer-term signals. Significantly, the 50-day EMA narrowed on the 200-day EMA, signaling a return to $1.29 to bring the $1.2862 – $1.2785 support band into play.
However, a GBP to USD move through the 50-day EMA ($1.29719) would give the bulls a run at $1.31.
The 14-4H RSI reading of 40.04 sent bearish signals, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the 50-day EMA, signaling a return to sub-$1.29 to bring the $1.2862 – $1.2785 support band into view.
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