The GBP/USD has been moving in a cautious bullish move over the last 3 sessions in a row, settling between 1.3612, the highest for the pair in 3 months, and the support at 1.3495 level, and is around 1.3545 at the time of writing. The USD was quick to give up gains after the release of the Federal Reserve’s last minutes of meeting, as they maintained the plan of 3 interest rate raise for 2018. The minutes suggested that the low inflation level in the country is transitional and that the job market strength will support facing its implications. The decision makers at the Federal Reserve agreed largely last month that the US tax reform would benefit the economy, however, they split in terms of whether the resulting growth will lead to faster rate raise this year.
We highlighted yesterday that the daily chart for this pair shows that it is overbought and it will witness a bearish corrective move anytime, especially, if there were any new signs related to BREXIT negotiations. The UK service sector grew strongly. The US job data from ADP and the unemployment claims showed variation in the results affecting the USD, despite the US stock markets achieving new record highs.
Technically: The GBP/USD is in an upward corrective moves by settling above the 1.35 peak and the next resistance levels for this pair will be at 1.3635 and 1.3720. I still prefer selling the pair at each upward bounce, as the BREXIT fears are still standing and won’t be solved soon. On the bearish side, the nearest support levels for the pair are currently at 1.3445 and 1.3360, and will go down strongly in case it moved below 1.3300.
On the economic data front: This pair will be awaiting an important announcement of the US jobs data, including the unemployment rate, the job mumbers and the average hourly wages, as well as the service ISM index. The market will monitor any updates regarding the BREXIT negotiations, as well as, Trumps internal and external policies.
