GBP/USD Forecast: 100-DMA is the next bullish target, focus on Carney’s speech

Haresh Menghani FXStreet

The latest BoE monetary policy decision turned out to be a non-event for the market, through a combination of supporting factors kept pushing the GBP/USD pair higher on Thursday. Against the backdrop of Brexit optimism, broad-based US Dollar selling provided an additional boost and lifted the pair to over six-week tops. Easing US-China trade tensions, coupled with softer US consumer inflation figures prompted some aggressive USD selling and turned out to be one of the key forces behind the pair's strong move beyond the 1.3100 handle.

The pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading range through the Asian session on Friday. With the USD price dynamics turning out to be an exclusive drier of the pair's momentum, market participants now look forward to important US macroeconomic data, including the retail sales and prelim UoM consumer sentiment index, for some fresh impetus.

Ahead of today's key US releases, investors will focus on the BoE Governor Mark Carney's scheduled speech, due later in the European session. This coupled with any fresh Brexit-related news/development might influence the price action and produce some meaningful trading opportunities on the last trading day of the week.

Looking at the technical picture, the pair has been finding decent dip-buying interest and scaling higher along a short-term ascending trend-line on the 1-hourly chart. Technical indicators on hourly/daily charts are holding well above their mid-lines (bullish territory) and the set-up points to an extension of the positive momentum further towards 100-day SMA hurdle near the 1.3180 region.

On the flip side, the ascending trend-line, currently near mid-1.3000s, might continue to act as an immediate strong support and limit any meaningful retracement slide. A convincing break through the mentioned support, leading to a subsequent weakness below 100-hour SMA near the 1.3030 region might negate the near-term bullish outlook and prompt some aggressive long-unwinding trade.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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