GBP/USD remained neutral bias trading yesterday as PM May spoke to UK citizens, not adding much for Brexit issue but instead, a speech was given, with a mobilizing content with efforts to add more votes to her already-high polls for June's elections. Market is already expired on the fact that May is a winner and the the pair has fulfilled its purpose, as a result, Sterling remained within last week trading range, but in absence of macro events (Yesterday) responsible for GBP/USD bullish momentum, the weakness in US dollar was the main pusher for the pair.
Currently, the pair is trading 1.2915 with 24-price action for Tuesday's trading sessions and 12-pips above it's 20-EMA moving average one hour time frame. The pair has a support by an increasing trend line (H1), and US dollar opened Tuesday's sessions with bearish momentum as the Index dropped by 3-pips behind yesterday's low at 98.65 at the moment which should give enough room for GBP/USD to surge further more. Latest claims by U.S media suggest that Trump has leaked classified data with Russian Officials through last week meeting.
Sterling awaits major data today that hold key figures for April-2017, which in case positive, traders should expect fueling bullish rallies for GBP/USD as market tend to price the next BOE Interest Rates meeting.
Fundamentals:
1- GBP - CPI (Consumer Price Index) y/y today at 8:30 AM GMT.
2- GBP - PPI (Producer Price Index) y/y todat at 8:30 AM GMT.
3- GBP - Core CPI today at 8:30 AM GMT.
4- GBP - RPI (Retail Price Index) today at 8:30 GMT
5- USD- Building permits today at 12:30 AM GMT.
Note: Sterling data has a heavier impact, more than USD and taking into consideration that currently bad politics surrounds the White House. Traders should focus on UK data more.
Technical Overview:
Trend: Bullish / Sideways
Resistance levels: R1 1.2953, R2 1.3062, R3 1.3172
Support Levels: S1 1.2829, S2 1.2752, S3 1.2678
Comment: GBP/USD currently bullish but due to high impact data, expectations of high volatility after release. A break above R1 level supported by positive data and June coming elections as PM May heads the polls, should fuel Sterling with strong bullish waves seeing R2 level as the first destination, a weaker U.S Dollar performance could contribute to the pair additional rallies seeing R3 as next target. On the other hand, a negative data would decrease odds of BOE next rate meeting which could result in declines for GBP/USD, but dips should fight S1 level, in case of penetration, additional declines are expected with selloffs and wash towards S2&S3 level. Keep in mind that the pair is still supported by positive expectations for June elections which indicates that GBP/USD can overcome losses. closing below S3 alerts for bearish momentum. Closing above R1 is positive.
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