GBP/USD outlook: Cable at two-week high above 1.25 ahead of US labor report

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable is establishing above 1.2500 mark, in extension of six-day rally from 1.2310 higher base, boosted by hawkish BoE outlook, with the latest acceleration sparked by fresh weakness of the US dollar, as tensions about debt ceiling eased.

Bulls cracked pivotal Fibo barrier at 1.2538 (61.8% of 1.2679/1.2310 pullback) with break here to add to positive signals and unmask key barrier at 1.2679 (2023 high of May 10), although strongly overbought stochastic and fading bullish momentum warn that bulls may take a breather.

Near-term bias is expected to remain bullish while the action stays above 1.2500 handle.

Markets focus on US labor data for fresh signals, with weak May numbers to relax bets on Fed rate hikes and raise pressure on greenback.

Conversely, the pound would face increased headwinds on upbeat US job numbers.

Res: 1.2550; 1.2592; 1.2640; 1.2679.
Sup: 1.2544; 1.2500; 1.2451; 1.2414.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2714
2. R2 1.2627
3. R1 1.2575
PP 1.2488
1. S1 1.2437
2. S2 1.235
3. S3 1.2298

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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