GBP/USD analysis: down over 100 pips ahead of BOE

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3201

Pound's momentum sent the GBP/USD pair up to 1.3328, its highest since September last year early London, but gains were short-lived, as mixed UK employment data failed to keep market's mood high. Indeed, headline readings surprised to the upside, as the UK reported that the number of people in work for the three months to July reached 32.13 million, whilst the unemployment rate fell to 4.3%, its lowest in 42 years. However, average hourly remained unchanged at 2.1%, both including and excluding bonuses during the same period. When compared to increasing inflationary pressures in the UK, real earnings are down on the year, which means that the likelihood of a BOE's rate hike decreased substantially in less than 24 hours. The Central Bank, is having its monetary policy meeting this Thursday. The pair seems now poised to extend its decline, as in the 4 hours chart, the price broke below the 1.3225 price zone, where it has its 20 SMA and the 23.6% retracement of its latest bullish run between 1.2908 and the afore mentioned high of 1.3328, heading now towards the 1.3160 region, where the pair bottomed earlier this week, and also has the 38.2% retracement of the mentioned rally. A recovery beyond 1.3225 should take off the pair some of the current bearish pressure, although a clearer picture will come after Carney & Co. announcement.

Support levels: 1.3165 1.3130 1.3095

Resistance levels: 1.3225 1.3260 1.3300

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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