GBP to USD Forecasts: Bulls Eye $1.28 on US Jobs Report

Highlight

• The GBP to USD was down 0.04% to $1.27337 this morning.
• UK house price numbers and Bank of England commentary will draw interest today.
• However, the US Jobs Report will be the main report of the day.

It is a relatively quiet day ahead for the GBP to USD. UK house price figures for June will be in focus today. However, we expect UK house prices to have a limited impact on Bank of England monetary policy expectations and the GBP to USD.

With the economic calendar on the light side, investors should consider Bank of England chatter. Monetary Policy Committee member Catherine Mann is on the calendar to speak today. Investors should also monitor the news wires for BoE comments to the media.

Hawkish bets continued to deliver GBP to USD price support despite hotter-than-expected US economic indicators from Thursday.

Away from the economic calendar, US-China trade chatter also needs consideration.

The US Session

It is a big day on the US economic calendar. The all-important US Jobs will be the focal point. A surge in nonfarm payrolls and hotter-than-expected wage growth would support a more hawkish post-summer Fed monetary policy outlook.

US economic indicators from Thursday fueled bets on a July rate hike but had a limited impact on sentiment toward a September move. The US Jobs Report needs to align with the ADP Report and signal a pickup in wage growth to change the September narrative.

According to the CME FedWatch Tool, the probability of a 25-basis point July Fed rate hike stood at 91.1% versus 90.5% on Wednesday. Significantly, the chances of the Fed lifting rates to 5.75% in September stood at 26.4%, up from 18.1% on Wednesday.

GBP to USD Price Action

The GBP to USD was down 0.04% to $1.27337 this morning.

Daily Chart

The Daily Chart showed the GBP to USD briefly test the lower level of the $1.2780 – $1.2810 resistance band before easing back. Looking at the EMAs, the GBP to USD sat above the 50-day ($1.25802) and 200-day ($1.23437) EMAs, signaling bullish momentum over the near and long term.

Notably, the 50-day EMA continued to pull away from the 200-day EMA and reflected a bullish trend.

Looking at the 14-Daily RSI, the 58.55 reading signals a moderately bullish trend, aligned with the 50-day and 200-day EMAs. A move through the lower level of the $1.2780 – $1.2810 resistance band would support a run at the upper level of the resistance band.

4-Hourly Chart

Looking at the 4-Hourly Chart, the GBP to USD faces strong resistance at the $1.2750 psychological level. After the bullish Thursday, the GBP to USD sits above the 50-day ($1.27031) and 200-day ($1.26232) EMAs, sending bullish signals.

Significantly, the 50-day EMA pulled further away from the 200-day EMA, signaling another run at the lower level of the resistance range of $1.2780 – $1.2810.

The GBP to USD must hold above the 50-day EMAs to target the current-week high of $1.27810 (Thurs).

The 14-4H RSI reading of 57.27 indicates a moderately bullish stance, with buying pressure outweighing selling pressure. Significantly, the RSI aligns with the EMAs and signals a possible breakout from the lower level of the current resistance range of $1.2780 – $1.2810.