GBP/USD analysis: sideways on consolidation mode below 1.2700
|GBP/USD Current Price: 1.2691
The GBP/USD pair moved sideways all day, with limited volatility. Bank of England’s presentation at the Parliament offered no surprises. Governor Carney criticized the leading candidate for PM, Boris Johnson, for his approach to the Brexit process. The name of May’s successor will be known late-July. No relevant data is expected on Thursday from the UK, a speech by BoE Broadbent is scheduled. Regarding the US, Durable Goods Orders dropped 1.3% in May, more than expected, but the core and ex-transportation orders rose and offset the main headline. US Treasury Secretary Mnuchin fueled optimism about a trade deal between the US and China and also boosted equity prices. President Trump is on its way to the meeting. The main focus will rotate around the US-China trade deal and also of relevance will be the meetings between Trump and Erdogan and also with Putin. The improvement in risk sentiment and market participants (re)considering how and when the Federal Reserve will cut rates, triggered a move higher in US bond yields. Still, Cable remained in the range.
From a technical perspective, not much has changed over the last 24 hours as the pair move sideways in a small range between 1.2715 and 1.2660. The bottom of the range is also were the flat 20-day SMA stands. Below that level, more losses should be expected, initially to the immediate support at 1.2640; below the 1.2600/05 zone should limit the downside. On the upside, Cable offers not much clarity unless it climbs and consolidates above 1.2760. Overall, GBP/USD continues to move sideways in a small range within another broader range with the same bottom and the upper limit at 1.2760.
Support levels: 1.2660 1.2630 1.2605
Resistance levels: 1.2705 1.2755 1.2800
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