GBP/USD: Bullish outside-day reversal above 1.3270

GBP/USD created a bullish outside-day candle on Thursday as Bank of England (BOE) Chief Economist called for a rate hike.
A close today above 1.3270 would confirm a bullish outside-day reversal or a short-term bearish-to-bullish trend change.

Omkar Godbole FXStreet Contributor

The GBP/USD rose to 1.3270 on Thursday, engulfing the price action seen on Wednesday after the BOE Chief Economist Andy Haldane unexpectedly joined rate hike camp.

At press time, the pair is trading at 1.3264. Haldane turned hawkish for the first time since joining the monetary policy committee four years ago and that has boosted the odds of a 25 basis point rate hike in August. So, the GBP will likely remain bid.

Further, the rumors of US-China trade talks could stabilize the risk sentiment in the European and US stocks and the resulting rise in GBP/JPY will likely push GBP/USD higher.

Thus, GBP/USD may close today above 1.3270, confirming a short-term bearish-to-bullish trend change.

The only risk to the British Pound stems from the 10-year US-UK bond yield spread, which continues to rise in the USD-positive manner despite Haldane's hawkish vote.

GBP/USD Technical Levels

Resistance: 1.3274 (10-day MA), 1.3319 (4H 100MA), 1.3385 (4H 200MA).

Support: 1.3211 (support on 4-hour chart), 1.3146 (June 20 low), 1.3102 (previous day's low).

10-year US-UK yield spread

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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