GBPUSD Approach Yearly Highs On USD Weakness


GBPUSD regain today the positive momentum as the pressure to USD returns after politicians in Washington failed to reach an agreement and continue to negotiate on the new relief package that will support the US economy. The rising number of new coronavirus cases also weighs on the greenback.

A mixed bag of data today from the USA doesn’t help USD. The Services PMI came in at 50, topping the expectations of 49.6 in July, while the PMI Composite registered in at 50.3, also above the expectations of 50.

The private payrolls increased by 167,000 in July below the estimates of one million. The jobs creation slowed down in July after the sharp rise in June to 4.314 million. The market has recovered almost 8 million jobs but is well below the 19.7 million jobs lost during the coronavirus lockdown in March and April 2020. The US Trade Balance reported at $-50.7 billion, below the forecasts of $-50.1 billion in June.

From the United Kingdom earlier today the Markit Services PMI came in at 56.5, slightly lower than forecasts of 56.6 in July. The PMI Composite reported at 54.9, beating the estimates of 54.8.

British pound traders await the Bank of England monetary policy decision tomorrow. Analysts expect that BOE will keep interest rates unchanged and they want to hear the banks view on the current state of the recovery. GBP bulls hope for an extension of the quantitative easing program that will support the pound.

GBPUSD Price Analysis   

GBPUSD is 0.62% higher at 1.3152, and now approaching the yearly highs after two days of selling pressures that failed to cancel the bullish momentum. On the upside, the pair would face the resistance at 1.3178 the high from July 31 trading session. Next support for GBPUSD would be met at 1.3206 the top from March 9. More selling pressure awaits at 1.3299 the high from December 31, 2019. 

On the other side, initial support stands at 1.3057 today’s low. I expect more bids to emerge at 1.2909 the low from July 29. A break below 1.2705 – the 200-day moving average – would cancel the bullish momentum. 

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GBPUSD Daily Chart

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