Slobodan Drvenica
Windsor Brokers
GBP/USD
Cable hit new four-month high in European trading on Thursday, lifted by better than expected UK May GDP numbers, which poured cold water on expectations for BoE rate cut next month.
Fresh strength broke through pivotal barriers at 1.2846/60 (200WMA/former top June 12) and pressuring key barrier at 1.2893 (2024 high, posted on March 8).
Firmly bullish technical picture on daily chart (Tenkan/Kijun-sen forming a bull-cross and bullish momentum is strengthening) support the action, though headwinds on approach to 1.2893 could be expected, due to overbought conditions and significance of barrier.
Markets shift focus towards release of US June inflation report which is expected to provide fresh signals.
Weaker than expected US CPI numbers would further boost pound as further easing in consumer prices would bring the Fed one step closer to rate cut and subsequently deflate dollar.
Cable could accelerate through 1.2900 and probably challenge psychological 1.30 barrier, in case of stronger CPI downside miss.
Conversely, bulls may lose traction if US price pressures rise in June.
Session low (1.2845) offer initial support, followed by 1.2800/1.2780 (psychological / daily higher base and 1.2760/53 (rising 10DMA / broken Fibo 76.4% of 1.2893/1.2299).
Res: 1.2893; 1.2900; 1.2950; 1.3000.
Sup: 1.2845; 1.2800; 1.2780; 1.2753.
Interested in GBP/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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