GBP/USD has been quite indecisive and volatile recently while residing above 1.3050 area with a daily close. GBP has been holding the upper hand in the pair, while USD gained certain impulsive momentum recently just ahead of the federal funds rate hike this week.
Today on the GBP side, MPC Member Vlieghe spoke about the nation's key interest rates and future monetary policies which influenced the currency quite positively. However, lack of a clear statement about further development did not provide much impulsive pressure as expected. This week the economic calendar includes the UK Current Account report which is expected to decrease to -19.4B from the previous figure of -17.7B and Final GDP which is expected to remain unchanged at 0.4%. Thus, GBP is expected to be quite slow with the development if market sentiment follows the economic results of the week.
On the USD side, FOMC Economic Projections, FOMC Statement, and Federal Funds Rate are going to be published on Wednesday. The benchmark funds rate is expected to be lifted to 2.25% from the previous value of 2.00%. Though the rate hike is quite imminent, certain volatility may be observed on the USD side throughout the week. Moreover, today US CB Consumer Confidence report is going to be published which is expected to show a slight decrease to 132.2 from the previous figure of 133.4, Richmond Manufacturing Index is expected to decrease to 22 from the previous figure of 24, and HPI is expected to be unchanged at 0.2%.
As of the current scenario, a good amount of volatility is expected throughout this week in this pair as high impact economic events and reports on the both currencies are going to be published in the coming days. Though GBP is currently quite positive in comparison to USD, the USD rate hike may lead to certain weakness on the GBP side in the process.
Now let us look at the technical view. The price is currently residing above 1.3050 area with a daily close after certain impulsive pressure on Friday. The price has successfully breached above the Kumo Cloud resistance while also being held by the dynamic levels 20 EMA, Tenkan and Kijun line as support which is expected to lead to further upward movement in this pair with target towards 1.32 and later towards 1.3350 resistance area in the future. As the price remains above 1.3050 with a daily close, the bullish bias is expected to continue.
SUPPORT: 1.3050, 1.2850
RESISTANCE: 1.3200, 1.3350
BIAS: BULLISH
MOMENTUM: VOLATILE
