GBP/USD has been impulsive amid the bullish pressure recently which led the price to reside above 1.3050 area with a daily close. Currently the pair is trading without a particular direction which might trigger certain corrections along the way. Ahead of macroeconomic reports from the UK and the US this week, the pair is expected to trade with higher volatility.
As the dollar index is holding above the key area, USD is currently leading with an edge which might lead to certain bearish pressure in the pair for a specific period. In light of the recent mixed NFP data and after the rate hike from 2.00% to 2.25%, the US currency gained momentum but could not quite sustain it against GBP quite well. Today USD NFIB Small Business Index report is going to be published which is expected to increase slightly to 108.9 from the previous figure of 108.8 and IBD/TIPP Economic Optimism report is expected to show a decrease to 54.6 from the previous figure of 55.7. Ahead of the high impact economic reports this week including PPI and CPI which are quite optimistic with the expectations, USD might experience a clear advantage for further gains in the process.
On the GBP side, today BRC Retail Sales Monitor report was published with a decrease to -0.2% from the previous value of 0.2% which did not have a serious impact on GBP but made the price a bit indecisive for a while. GBP is expected to struggle a bit further before pushing higher in the coming days ahead of the GDP report on Wednesday, which is expected to decrease to 0.1% from the previous value of 0.3% and Manufacturing Production to increase to 0.1% from the previous negative value of -0.2%.
Meanwhile, mixed results of the US and UK reports are expected to determine trend momentum. Though GBP is expected to struggle for gains and USD is likely to receive solid support, vice-versa results may lead to change in market sentiment and current price action. To sum up, USD may assert its strength over GBP in the coming days.
Now let us look at the technical view. The price is currently residing above 1.3050 with certain retests along the way recently whereas the bearish momentum is still present in the market. As the price residing above the Kumo cloud along with the support of dynamic levels like 20 EMA, Tenkan, and Kijun line, the price is expected to push higher after certain correction and retrace towards 1.3000-50 area before pushing higher with target towards 1.3200 to 1.3300 area in the future. As the price remains above 1.3000 area, the bullish bias is expected to continue.
SUPPORT: 1.3000-50
RESISTANCE: 1.3200, 1.3300
BIAS: BULLISH
MOMENTUM: VOLATILE
