Tuesday, July 17, 2018

GBP/USD - 17 July 2018

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Fundamental Highlights

The Pound continues to rise as investors feel optimistic with regards to the state of the U.K economy. Positive economic data coupled with stronger expectations of a soft-Brexit scenario allow investors to feel safe buying the Pound. Key U.K labor data are set to be released today and upbeat numbers will add to the positivity by increasing the likelihood of a BoE rate hike in August.

The Pound is also being boosted by the drop in the U.S Dollar which continues to be sold-off following Friday's disappointing U.S Consumer Sentiment number.

Technical Analysis

After dropping towards the 1.414 Fibonacci extension, the pair formed a Bullish Reversal ABCD pattern. Following the bounce off the 1.3110 support level, the pattern signals a rise at least towards 1.3290 which coincides with the 200-period moving average (purple) and the 0.618 Fibonacci retracement.

Due to major economic data releases today, the pattern's reversal might overextend and a break above 1.3290 is very likely if U.K labor data prints favorable and satisfactory.

Support: 1.32110 1.31332
Resistance: 1.32901 1.33604
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