GBP/USD analysis: recovery limited by diminishing chances of a rate hike

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2895

The Pound surged against the greenback reverting its early weekly losses, getting a boost from solid UK employment data, as in the three months to May, there were 32.01 million people in work, 175K more than in the previous three months, while the unemployment rate fell to its lowest since 1975, down to 4.5%. Wages grew by 2% in June, against an expected 1.9% rate of expansion, and above a revised 1.8% in May, but lag when compared to inflation. The GBP/USD pair settled a few pips below the 1.2900 level, bouncing from a daily low of 1.2811, level achieved after BOE's Broadbent said that he is not ready to hike rates. The pair bounced by the pip from the 50% retracement of its latest rally, recovering also above the 38.2% retracement of the same rally at 1.2860, the immediate support. In the 4 hours chart, the price has settled above a flat 20 SMA, while technical indicators are now stuck around their mid-lines, with no clear directional strength, limiting chances of a steeper recovery, as long as the price remains below 1.2925, the next Fibonacci resistance and this week's high.

Support levels: 1.2860 1.2810 1.2770

Resistance levels: 1.2895 1.2925 1.2960

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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