GBP/USD Forecast: likely to reach descending trend-channel resistance, Carney's speech eyed

Haresh Menghani FXStreet

The GBP/USD pair caught some fresh bids on Wednesday and remains supported by the incoming positive UK economic data. The latest positive surprise came from the UK Markit Services PMI, printing a seven month high level of 55.1 in June, and raise prospects for an imminent BoE rate hike move in August. The pair jumped to over one week high, around mid-1.3200s, but lacked any follow-through traction amid holiday-thinned market liquidity conditions.

The pair extended its consolidative price action and held comfortably above the 1.3200 handle through the Asian session on Thursday as investors now look forward to the BoE Governor Mark Carney's scheduled speech. Any clues over the central bank's monetary policy outlook would be enough to trigger a fresh bout of volatility across the GBP crosses.

From the US, the release of ADP report on private sector employment, the usual initial weekly jobless claims data and ISM non-manufacturing PMI will be looked upon for some short-term trading opportunities later during the early North-American session.

From a technical perspective, the pair retains its near-term bullish stance, especially after the recent sharp rebound from YTD lows, the 1.3050 area, set last Thursday. Hence, the ongoing momentum is likely to get extended towards 1.3275-80 intermediate resistance en-route the 1.3300 handle. A follow-through buying interest has the potential to lift the pair towards a short-term descending trend-channel resistance, currently near the 1.3335 region, where it is likely to show reluctance to extend the rally.

On the flip side, any meaningful retracement back below the 1.3200-1.3190 immediate support is likely to find some buying interest near the 1.3140-35 zone and is followed by a strong support near the 1.3100 handle. Only a decisive break below the mentioned supports might negate the positive outlook and realign the pair with bearishly trending short-term technical indicators.

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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