GBP/USD Price Forecast: The BoE and Fed to Test Buyers at $1.215
Bank of England Governor Andrew Bailey will speak at the ECB Forum on Central Banking. Bailey will speak at 1330 BST today.
The markets will be looking for any comments on the economic outlook and monetary policy following the latest economic indicators.
Prelim June private sector PMIs highlighted further wage growth pressure, a bugbear for the BoE, and weak demand across the private sector. May retail sales figures also reflected the impact of inflationary pressures on consumption.
Governor Bailey’s view on last week’s indicators and possible influences on monetary policy will be the key ahead of Fed Chair Powell later in the day.
GBP/USD Price Action
At the time of writing, the Pound was up 0.09% to $1.21926.
A mixed start to the day saw the Pound rise to an early high of $1.22127 before falling to a low of $1.21725.
The Pound left the Major Support and Resistance Levels untested early on.
The Pound will need to move through the $1.2218 pivot to target the First Major Resistance Level (R1) at $1.2255 and Tuesday’s high of $1.22914.
A pickup in market risk appetite would support a breakout from the morning high of $1.22127
An extended rally would test the Second Major Resistance Level (R2) at $1.2329 and resistance at $1.2350. The Third Major Resistance Level (R3) sits at $1.2439.
Failure to move through the pivot would bring the First Major Support Level (S1) at $1.2145 into play.
Barring an extended sell-off, the Pound should steer clear of sub-$1.21. The Second Major Support Level (S2) at $1.2107 should limit the downside. The Third Major Support Level (S3) sits at $1.1997.
Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.
At the time of writing, the Pound sat above 50-day EMA, currently at $1.22534. The 50-day EMA eased back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA: GBP/USD negative.
A move back through the 50-day EMA, currently at $1.23108, would support a run at the 100-day EMA, currently at $1.22976 and R2.
However, the GBP/USD fall through the 50-day EMA leaves S2 and support at $1.21 in play.
The US Session
Following market sensitivity to US consumer confidence figures on Tuesday, the market focus shifts to finalized Q1 GDP numbers. A downward revision would spook the markets and weigh on riskier assets and the GBP/USD pair.
The key driver, however, will be Fed Chair Powell, due to speak shortly after the the US GDP numbers.