GBP/USD - BoE In Spotlights!

GBP/USD continues to stay higher in the short term, at 1.2556 level, the minor drop could be completed if the price will fail to make another lower low on the Daily chart. You should be careful today because the BoE will definitely bring high volatility on this currency pair, so anything could happen during this high impact event.

The BoE is expected to hold the Official Bank Rate steady at 0.10%, the MPC members could vote unanimously for this decision, but they could expand the bond-buying program. More stimulus measures, quantitative easing, could shake the markets, it remains to see how the Pound will react as the Bank of England needs to do more to help the UKs economy to recover after the Coronavirus crisis.

The US data could bring life on the GBP/USD as well, the Unemployment Claims could drop from 1542K to 1300K in the previous week, the CB Leading Index is expected to increase by 2.4%, while the Philly Fed Manufacturing Index may increase from -43.1 points to -23.0 points in June.

GBP/USD has found strong support at the 50% retracement level, it has registered only a false breakdown with great separation, so the outlook is still bullish if the correction is only a temporary one. Still, the pair remains under some bearish pressure as long as it is traded within the black descending pitchforks body, below the upper median line (uml).

The pair could move sideways in the short term, between the 50% and 61.8% levels, only a valid breakout below or above these obstacles will bring a clear direction and a fresh trading signal. GBP/USD it seems undecided, but I really hope that well have confirmation today if the price will resume the upside movement or that the pair will register a larger drop.

GBP/USD will decline further towards the median line (ml) of the black descending pitchfork if the price will close and stabilize below the 50% retracement level. On the other hand, a sideways movement and a valid breakout above the upper median line (uml) will announce a further increase.

The pair has failed to reach the median line (ml) of the minor descending pitchfork in the first attempt, so an upside breakout from the pitchforks body will signal a potential increase towards the 1.2812 high and towards the median line (ML).

The major resistance is seen at the median line (ML) of the orange ascending pitchfork, above the 61.8% retracement level, while the near-term support is represented by the 50% level.

GBP/USD pair has failed to stabilize above the weekly Pivot Point (1.2608) signaling some kind of pressure. It is trapped between the sliding parallel lines (sl, sl1) of the descending pitchfork, a breakdown from this channel and below the 50% level will accelerate the sell-off, while an upside breakout, above the sliding line (sl), will suggest buying again as the correction will be ended.

The S1 (1.2404) level could be used as near-term support as well if the GBP/USD will decline in the upcoming hours. Another false breakdown with great separation below the 50% retracement level, a pin bar, or a bullish engulfing will bring another long opportunity sooner on this pair.

About Olimpiu Tuns

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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