GBP/USD making a hopeful run for 1.34 for a quiet Tuesday

Sterling peeking to the upside ahead of a quiet Tuesday session.
BoE action on Thursday could leave GBP traders on the sidelines for the time being.

Joshua Gibson FXStreet

The GBP/USD is managing to catch some lift ahead of the London market session for Tuesday, rising into 1.3270 in the Asian markets.

The GBP has been clattering along the bottom against the Greenback this week, with the pair sticking close to lows near 1.3230 in Monday's trading, a level the GBP/USD became familiar with after bottoming out in late May. The pair managed to stage a technical recovery to the 1.3470 region for a brief moment, but confidence in the Sterling has remained muted, keeping the pair close to lows for the time being.

Tuesday sees little action on the Sterling side of things, and overall market sentiment can be expected to remain in the captain's chair. Markets have turned cautious in early Tuesday action after the US ramped up the trade war rhetoric, promising to impose yet further tariffs on China with the US Treasury Department seeking an additional $200 billion in tariffs on Chinese imports. Market sentiment soured on the reaction, and risk flows have been put in a defensive stance early on in the week.

The upcoming US session sees mid-tier Housing Starts (forecast 1.317 million, prev. 1.287 million) and Building Permits (forecast 1.350 million, prev. 1.352 million) for the month of May, both dropping at 12:30 GMT. GBP traders are likely to have their focus turned to the Bank of England's (BoE) next rate decision, coming in this Thursday, and whil the BoE is already expected to remain steady on rates for the time being, traders will be looking for changes in the central bank's rhetoric or outlook.

GBP/USD levels to watch

FXStreet's own Valeria Bednarik notes that despite the Sterling's bearish activity as of late, potential remains for a mild recovery from the current levels: "the 4 hours chart for the pair shows that it remains well below a bearish 20 SMA, while technical indicators have managed to post modest bounces from near oversold readings, still far below their midlines and therefore from suggesting a possible recovery ahead. The main support is Friday's low at 1.3210, with a break below the level probably triggering a steeper decline for this Tuesday."

Support levels: 1.3210 1.3170 1.3135

Resistance levels: 1.3300 1.3345 1.3390

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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