GBP/USD Price Analysis: Bounces off 10-DMA ahead of UK employment, US inflation

GBP/USD picks up bids to reverse the week-start retreat from monthly high, pares the biggest daily loss in over a week.
Bullish MACD signals, sustained trading within fortnight-long ascending trend channel keeps Cable buyers hopeful.
UK employment numbers need to defend hawkish BoE bias to push back the Pound Sterling bears.
Cable pair’s bearish momentum hinges on 1.2420 break and the FOMC.

Anil Panchal FXStreet

GBP/USD clings to mild gains around 1.2520 as the Cable traders await the UK employment report on early Tuesday. In doing so, the Pound Sterling reverses the previous day’s pullback from the highest level in a month while consolidating the biggest daily loss in seven days.

That said, the 10-DMA level joins the bullish MACD signals to restrict short-term GBP/USD downside within a two-week-old rising channel. However, the UK’s job numbers and the US inflation data, as well as Wednesday’s Federal Open Market Committee (FOMC), appear more important catalysts to watch for clear directions.

Also read: GBP/USD trades with modest gains above 1.2500 mark ahead of UK jobs data, US CPI

Technically, the Cable pair’s rebound from the short-term DMA support of 1.2488 gains back-up from the upbeat oscillator to lure short-term buyers. However, the aforementioned bullish channel’s top line, close to 1.2610 at the latest, restricts the GBP/USD pair’s further upside.

It should be noted that multiple hurdles marked since late April also challenge the GBP/USD bulls around 1.2580.

Even if the pair buyers manage to defy the stated bullish channel formation by crossing the 1.2610 hurdle, the yearly top marked in May around 1.2680 appears the last defense of the bears.

On the contrary, a downside break of the 10-DMA can quickly fetch the GBP/USD price to the stated channel’s bottom line, close to 1.2430 as we write. However, an upward-sloping support line from early March, near 1.2420, holds the ticket for the seller’s entry.

GBP/USD: Daily chart

Trend: Limited upside expected

Additional important levels

Overview
Today last price	1.2517
Today Daily Change	0.0012
Today Daily Change %	0.10%
Today daily open	1.2505

Trends
Daily SMA20	1.2442
Daily SMA50	1.2471
Daily SMA100	1.231
Daily SMA200	1.2021

Levels
Previous Daily High	1.2599
Previous Daily Low	1.2487
Previous Weekly High	1.259
Previous Weekly Low	1.2369
Previous Monthly High	1.268
Previous Monthly Low	1.2308
Daily Fibonacci 38.2%	1.253
Daily Fibonacci 61.8%	1.2557
Daily Pivot Point S1	1.2462
Daily Pivot Point S2	1.2418
Daily Pivot Point S3	1.2349
Daily Pivot Point R1	1.2574
Daily Pivot Point R2	1.2643
Daily Pivot Point R3	1.2686

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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