Sun, June 16, 2024

GBP/USD Trading at 1.2718 with 0.03% Daily Decline

GBP/USD: British pound sterling coins. Bank of England (BoE)

Quick Look:

  • The short-term trend remains bullish, with GBP/USD Price at 1.2718 with a slight daily decline of 0.03%.
  • Support at 1.2688/1.2654, resistance at 1.2800/1.2970, 21-day EMA at 1.2712, bullish MACD and RSI above 50.
  • UK Employment Data expected job contraction of 100,000; wage growth at 6.1%, impacting inflation.
  • The strong US Dollar impacts GBP/USD, trading between 1.2800 and 1.2600.

The current price of GBP/USD stands at 1.2718, reflecting a slight daily decline of 0.03%. Despite this marginal drop, the short-term trend remains bullish, supported by several technical indicators. Key support levels for the currency pair are identified at 1.2688 and 1.2654, while resistance is projected at 1.2800 and 1.2970.

Technically, the pair trades within a rising channel, with its lower boundary at 1.2700 and an upper threshold at 1.2970. Notably, the 21-day Exponential Moving Average (EMA) is positioned at 1.2712, indicating a bullish stance. The Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI), above 50, further bolster this outlook. Psychological resistance is notably marked at 1.2800. Projections for GBP/USD suggest a potential trading range between 1.2800 and 1.2600.

UK Employment: Predicted Job Decline of 100,000

Analysts expect the UK employment report, scheduled for release on Tuesday, to highlight a contraction in job growth. Analysts predict a decrease of 100,000 jobs, following a previous reduction of 178,000. Wage growth continues to be a concern, with the current rate at 6.1%, up from the previous 6.0%, contributing significantly to inflationary pressures.

Market participants expect the Bank of England (BoE) to cut rates in November, although some speculate about potential early cuts in June or August. The evolving economic landscape and employment figures will be pivotal in shaping these decisions.

GBP/USD Impacted by Bullish Dollar Index

The Dollar Index remains bullish in global markets, reflecting ongoing strength in the US dollar. This strength impacts the GBP/USD pair, trading within the range of 1.28-1.26.

For the GBP against the Euro, the EUR/GBP pair trades in a range influenced by broader Eurozone economic trends. Similarly, the GBP/JPY is navigating through levels dictated by movements in the yen. These comparative analyses help contextualise the GBP’s performance against major global currencies.

Several factors are underpinning the strength of the GBP. The UK’s relatively high wage growth rate, currently at 6.1%, suggests robust domestic economic activity. This wage growth is a double-edged sword, as it supports consumer spending but also adds to inflationary pressures, which the Bank of England must carefully manage.

GBP/USD Projections: 1.2800 to 1.2600 Range

Projections for the GBP/USD pair suggest a potential trading range between 1.2800 and 1.2600, indicating that while the GBP may face short-term pressures, it has the potential to maintain its strength within this corridor. Market participants will be closely watching economic indicators and central bank policies to gauge the future direction of the GBP.

The GBP/USD pair navigates a complex landscape of technical indicators, economic data, and central bank policies. Despite short-term fluctuations, the underlying bullish trend suggests a resilient outlook for the GBP, supported by strong wage growth and strategic monetary policies.

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