GBP to USD Forecasts: Hawkish BoE Chatter to Bring $1.22 into Play

It is a relatively quiet day for the GBP/USD, with CBI Industrial Trend Orders for November in the spotlight. Following Wednesday’s return to $1.20, we can expect Pound sensitivity to today’s numbers. However, we don’t expect a lasting impact, with the stats unlikely to influence the Bank of England’s monetary policy intentions.

Better-than-expected private sector PMI numbers for November and hawkish BoE chatter should continue to deliver GBP/USD ahead of today’s stats.

On Wednesday, Bank of England Chief Economist Huw Pill reiterated the need to do more to bring inflation to target. Speaking at a Beesley Lecture, Huw Pill said,

“In my judgment, there is still some more work to do with Bank Rate in order to address prevailing inflationary pressures and complete the necessary normalization of monetary policy following a decade or more of exceptional accommodation.”

Following Huw Pill’s comments, Bank of England chatter will remain in the spotlight.

Monetary Policy Committee members Dave Ramsden, Catherine Mann, and Chief Economist Huw Pill will speak today. The markets will be looking for Dave Ramsden and Catherine Mann to support further rate hikes to deliver GBP/USD support.

GBP/USD Price Action

At the time of writing, the Pound was up 0.16% to $1.20737. A bullish start to the day saw the GBP/USD rise from an early low of $1.20459 to a high of $1.20776.

Technical Indicators

The Pound needs to avoid the $1.2002 pivot to target the First Major Resistance Level (R1) at $1.2132. 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 $1.2419.

A fall through the pivot would bring the First Major Support Level (S1) at $1.1924 into play. However, barring a risk-off-fueled pullback, the GBP/USD should avoid sub-$1.1850 and the Second Major Support Level (S2) at $1.1794.

The Third Major Support Level (S3) sits at $1.1586.

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 $1.18370. 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 S1 ($1.1924) and the 50-day EMA ($1.18370) would support a breakout from R1 ($1.2132) to target R2 ($1.2211). However, a fall through S1 and the 50-day EMA would give the bears a run at sub-$1.19. The 200-day EMA sits at $1.15884.

The US Session

There are no US economic indicators for the markets to consider, with the US markets closed for Thanksgiving. The lack of stats will leave the FOMC meeting minutes to resonate.