- GBP/USD picks up bids to reverse the week-start retreat from monthly high, pares the biggest daily loss in over a week.
- Bullish MACD signals, sustained trading within fortnight-long ascending trend channel keeps Cable buyers hopeful.
- UK employment numbers need to defend hawkish BoE bias to push back the Pound Sterling bears.
- Cable pair’s bearish momentum hinges on 1.2420 break and the FOMC.
GBP/USD clings to mild gains around 1.2520 as the Cable traders await the UK employment report on early Tuesday. In doing so, the Pound Sterling reverses the previous day’s pullback from the highest level in a month while consolidating the biggest daily loss in seven days.
That said, the 10-DMA level joins the bullish MACD signals to restrict short-term GBP/USD downside within a two-week-old rising channel. However, the UK’s job numbers and the US inflation data, as well as Wednesday’s Federal Open Market Committee (FOMC), appear more important catalysts to watch for clear directions.
Also read: GBP/USD trades with modest gains above 1.2500 mark ahead of UK jobs data, US CPI
Technically, the Cable pair’s rebound from the short-term DMA support of 1.2488 gains back-up from the upbeat oscillator to lure short-term buyers. However, the aforementioned bullish channel’s top line, close to 1.2610 at the latest, restricts the GBP/USD pair’s further upside.
It should be noted that multiple hurdles marked since late April also challenge the GBP/USD bulls around 1.2580.
Even if the pair buyers manage to defy the stated bullish channel formation by crossing the 1.2610 hurdle, the yearly top marked in May around 1.2680 appears the last defense of the bears.
On the contrary, a downside break of the 10-DMA can quickly fetch the GBP/USD price to the stated channel’s bottom line, close to 1.2430 as we write. However, an upward-sloping support line from early March, near 1.2420, holds the ticket for the seller’s entry.
GBP/USD: Daily chart
Trend: Limited upside expected
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