GBP/USD Signal Today - 04/07: Retesting 1.2700 (Chart)
(MENAFN- Daily Forex) Bearish view
Sell the GBP/USD pair and set a take-profit at 1.2700. Add a stop-loss at 1.2850.
Bullish view
Buy the GBP/USD pair and set a take-profit at 1.2850. Add a stop-loss at 1.2700.
The GBP/USD
exchange rate continued its recovery this week as
market participants waited for the upcoming jobs numbers. It rose to a high of 1.2775, its highest level since June 13th after the Fed minutes and the ADP jobs numbers PMI and jobs numbers
The GBP/USD pair rallied after the US published soft jobs and services PMI numbers. In a closely watched report, ADP said that the private sector created 150k jobs in June, missing the estimated 163k. The figure was also lower than the 167k jobs that the economy created a month earlier.
A separate report by the Institute of Supply Management (ISM) showed that the non-manufacturing PMI continued falling in June. The figure dropped from 53.8 in May to 48.8 in June, missing the expected 52.6. It was the first time that the sector contracted in months.
On the positive side, a report by S&P Global showed that the services sector continued its expansion during the month. It rose from 54.5 in May to 54.8 in June, beating the expected 54.6.
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The GBP/USD pair also rose after the Federal Reserve published minutes of the last meeting when the committee left interest rates unchanged between 5.25% and 5.50%. These minutes showed that the bank was still concerned about inflation in the US.
As a result, the committee committed to continue watching the coming inflation numbers for a confirmation that inflation was falling. These minutes confirmed the view that the Fed will likely slash interest rates in December.
The GBP/USD pair also continued rising as traders waited for Thursday's election in the United Kingdom. Most polls show that Tories will suffer a historic loss as Keir Stamer becomes the next prime minister. It is unlikely that the pair will react to this election unless Tories win/USD technical analysis
The GBP/USD pair bottomed at 1.2613 in June and on Monday. It has now bounced back and moved above the crucial resistance point at 1.2700. The pair has also jumped above the 50-period moving average and the Ichimoku cloud indicator.
The Relative Strength Index has also moved above the overbought level. Therefore, while more gains are possible, the pair will likely pull back and retest the crucial support level at 1.2700 as traders wait for the election results.
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