GBP/USD struggles to gather momentum above 1.29

Eren Sengezer FXStreet

The GBP/USD pair is moving sideways above the 1.29 handle in the NA session as FOMC Chairwoman Janet Yellen's remarks failed to spark a market reaction. As of writing, the pair is trading at 1.2930, up 0.37% on the day.

Fed's Yellen speech: Import prices are rising at a modest rate

Earlier in the session, the macro data from the U.S. couldn't provide a fresh impetus for the greenback either. Weekly jobless claims for the week ending July 7 came in at 247Ki missing the market expectation of 245K. On the other hand, the PPI, which was expected to remain unchanged in June, increased by 0.1%. The US Dollar Index, after spiking up to 95.70 in the European session is now at 95.58, recording modest daily gains. However, today's price action doesn't suggest what the next direction is going to be.

İnvestors now turn their attention to statements by Chicago Fed President Charles Evans and Lael Brainard, a member of the Board of Governors of the Federal Reserve System. Nevertheless, unless they deliver anything that markets don't already know, the consolidation theme is likely to continue until the CPI data is released from the U.S. on Friday. On a yearly basis, Consumer Price Index is expected to ease to 1.7% from 1.9% in June. If the actual reading beats the market consensus, Yellen's statement about low inflation being due to temporary factors could be confirmed and help the greenback gather strength.

Technical outlook

Although the pair eased from the daily high of 1.2955, it's still looking to close the day with earnings for the second time in a row amid hawkish BoE expectations. If the pair ends the day above the 1.2930 handle (Fib. 23.6% retracement of 21 - 30 June upsurge), it could aim for 1.2975 (Jul. 6 high), 1.3030 (Jun. 30 high) and 1.3100 (psychological level). On the downside, supports could be seen at 1.2870 (20-DMA), 1.2810 (Jul. 12 low) and 1.2770 (100-DMA).

GBP/USD neutral near term, between 1.2800 and 1.2975 – UOB

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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