GBP to USD Forecasts: Bulls to Target $1.22 as Momentum Gathers Pace
It is a quiet day for the GBP/USD. There are no UK economic indicators to influence the GBP/USD today. The lack of stats should allow recent BoE member commentary to resonate.
Hawkish BoE Monetary Policy Committee member chatter continued to deliver Pound support on Thursday.
MPC members Dave Ramsden and Catherine Mann delivered speeches on Thursday. Ramsden said,
“Although my bias is towards further tightening, if the economy develops differently to my expectation and persistent inflation stops being a concern, then I would consider the case for reducing Bank Rate, as appropriate.”
In considering inflation levels, Ramsden’s comments favor another big move in December.
MPC member Catherine Mann also delivered a hawkish statement, reportedly stating that inflation was likely to bet at the upper end of the Bank’s forecasts.
Following Catherine Mann and Dave Ramsden’s comments, Bank of England chatter will remain in the spotlight. However, with no MPC members speaking today, investors will need to monitor comments to the media.
GBP/USD Price Action
At the time of writing, the Pound was up 0.09% to $1.21227. A mixed start to the day saw the GBP/USD fall to an early low of $1.20963 before rising to a high of $1.21276.
The Pound needs to avoid the $1.2104 pivot to target the First Major Resistance Level (R1) at $1.2161. Risk-on sentiment and hawkish MPC member chatter would support a bullish session.
In the case of another extended rally, the GBP/USD would likely take a run at the Second Major Resistance Level (R2) at $1.2211. The Third Major Resistance Level (R3) sits at $1.2319.
A fall through the pivot would bring the First Major Support Level (S1) at $1.2054 into play. However, barring a risk-off-fueled pullback, the GBP/USD should avoid sub-$1.20 and the Second Major Support Level (S2) at $1.1996.
The Third Major Support Level (S3) sits at $1.1889.
Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The GBP/USD sits above the 50-day EMA, currently at $1.19040. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.
A hold above the Major Support Levels and the 50-day EMA ($1.19040) would support a breakout from R1 ($1.2161) to target R2 ($1.2211). However, a fall through S1 ($1.2054) would bring S2 ($1.1996) and the 50-day EMA ($1.19040) into view.
The US Session
There are no US economic indicators for the markets to consider, with the US markets on a half day for Thanksgiving. The lack of stats may leave the dollar on the back foot, with recent central bank commentary shifting policy divergence in favor of the Pound.