GBP/USD struggling to get a grip on 1.42 ahead of Carney's speech

Sterling is trapped in consolidation, lacking motivation in either direction ahead of BoE speeches.
Middle East concerns are clamping down on market sentiment that started the week with a kick upwards.

Joshua Gibson FXStreet

The GBP/USD is trapped within Wednesday's range, testing around 1.4180 ahead of the European markets.

The Sterling was unable to derive any significant momentum on Wednesday, pushing into 1.4220 but ultimately couldn't capture new ground, falling back below the 1.4200 handle as growing concerns over the Syria crisis continue to push the Middle East instability to the forefront of markets.

UK's PM May to ask Cabinet meeting about Syria strikes - Sky News

The economic calendar for the GBP today sees a cluster of speeches, kicking off with Monetary Policy Committee (MPC) Member Broadbent, who will be taking the podium early at 06:30 GMT, followed by the Bank of England (BoE) Credit Conditions Survey results at 08:30. After that will be the main event, a scheduled speech from the BoE's head, Mark Carney. Carney will be speaking later in the day at 19:00 GMT, where he will be delivering the closing speech for the Public Policy Forum's growth summit, in Toronto, Canada.

The US side of the economic calendar may spark some movement, with US Continuing and Initial Jobless Claims dropping at 12:30 GMT. Continuing Claims are expected to bump slightly from 1.808 million to 1.848 million, while Initial Claims are forecast to decrease, from 242 thousand to 230 thousand.

The UK economy has been middling as of late, and the growth that the UK has seen is being attributed to strong global conditions rather than domestic demand, as noted by the BCC quarterly survey here.

GBP/USD Levels to consider

As FXStreet's Chief Analyst Valeria Bednarik noted earlier, "the technical outlook is still positive, despite the rally seems to have lost momentum, as the pair is in a consolidative stage after recovering roughly 230 pips from last week's low. In the 4 hours chart, the 20 SMA has partially lost its bullish strength but continues heading north below the current level, while technical indicators ease from overbought territory, rather reflecting the ongoing retracement than suggesting an upcoming slide. A break through 1.4244, the high established last March, would favor a rally up to 1.4345, the highest post-Brexit referendum, while the bullish potential will be neutralized on a break below 1.4115."

Support levels: 1.4150 1.4115 1.4080

Resistance levels: 1.4200 1.4245 1.4290

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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