GBP/USD Forecast: Sellers aligned around 1.2660

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2581

UK inflation picked up in June but stands far below BOE’s 2% target.
Attention now shifts to the UK employment data to be out this Thursday.
GBP/USD is holding on to familiar levels, still unable to attract buyers.

The GBP/USD pair surged to 1.2649, amid a combination of risk-appetite and encouraging UK data. According to the Office of National Statics, inflation picked up in June to 0.6% YoY, beating the expected 0.4%. Still below BOE’s 2% target, the uptick in inflation is surely a positive sign of an economic recovery. Also, the Producer Price Index in the mentioned month declined by 0.8% YoY, better than the -1.1% anticipated. The pair, however, gave up most of its intraday gains to settle with modest gains in the 1.2580 price zone, as retreating equities supported a dollar’s comeback.

This Thursday, the UK will publish its latest employment data. The ILO unemployment rate for the three months to May is seen at 4.2% from 3.9% previously, while the Claimant Count Change in June is foreseen at 250K.

GBP/USD short-term technical outlook

The GBP/USD pair is technically neutral according to the 4-hour chart, unable to sustain gains beyond a flat 20 SMA. Technical indicators, in the meantime, lack directional strength around their midlines. Strong selling interest seems aligned around the 1.2650/60 price zone, while the 200 DMA stands around 1.2690. The bullish case will be firmer only if the pair manages to advance beyond this last.

Support levels: 1.2550 1.2505 1.2460

Resistance levels: 1.2660 1.2695 1.2740

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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