GBP/USD outlook: Bulls pause ahead of Powell

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable is holding within a narrow range under new multi-week high during European trading on Tuesday, as markets await today’s key event - the testimony of Fed Chair Powell.

Long upper shadow of Monday’s daily candle and overbought conditions on daily chart suggest that bulls may take a breather at 1.2800 zone (also Fibo 76.4% of 1.2860/1.2612 bear-leg).

Bullish studies favor further upside, with consolidation likely to be narrow, before final push towards targets at 1.2860/93 (Jun 12 high / 2024 top).

Comments from Powell are likely to be dovish and to add to expectations for rate cut plans however, Thursday’s release of US June inflation report would play significant role after policymakers reiterated their stance that rate cut decision will highly depend on economic data.

Initial supports at 1.2788/65 (Monday’s low / broken Fibo 61.8%) should ideally contain, with extended dips not to exceed daily Kijun-sen (1.2736) to keep larger bulls in play.

Res: 1.2822; 1.2845; 1.2860; 1.2893.
Sup: 1.2788; 1.2769; 1.2736; 1.2713.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2891
2. R2 1.2868
3. R1 1.2837
PP 1.2815
1. S1 1.2784
2. S2 1.2762
3. S3 1.2731

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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