GBP/USD Daily Price Forecast – GBP/USD Stagnates at 1.325 Handle Ahead of Carney’s Speech

The GBP/USD is trading around the 1.325 level ahead of Tuesday’s London markets, which sees a showing from two key central bankers in the upcoming sessions. The Bank of England’s (BoE) Mark Carney, alongside the BoE Deputy Governor Jon Cunliffe, will be delivering statements to the UK’s Treasury Select Committee regarding the Financial Stability Report, and traders will be keeping their eyes peeled for hints about the central bank’s forward-looking plans. Traders are expecting a rate hike from the BOE’s next rate call on August 2nd, and bulls are eager to establish an upward trend as Brexit continues to drag the Sterling down. Prime Minister Theresa May’s latest Brexit proposal has seen some key changes made by the House of Commons in voting yesterday, and the move by hard-line Brexiteers within May’s own party to introduce changes to the framework could prove lethal for PM May’s latest attempt to strike a successful middle ground between Brexiteers in the UK and EU leaders in Brussels, who have so far remained stalwart, providing little in the way of special concessions that the UK leavers have been demanding.

GBPUSD In Range

On the US side, the Fed’s Jerome Powell will be delivering his testimony to the Senate Banking Committee regarding the Semiannual Monetary Policy Report, and markets will be focused on the central banker’s words as the Fed is expected to remain on the hawkish side, keeping closely in-line with the Fed’s current gradual policy tightening. The greenback gained momentum in North American market hours after US retail sales and also amid higher US bond yields, despite moving off daily lows it was still mostly lower across the board. Meanwhile the Bank of England’s (BoE) Chief Economist Andy Haldane who shocked markets last month by voting for an immediate interest rate hike, made the comments in a blog detailing a trip to Wales ending on June 26. Two days later, he made a speech in which he said that a steady pick-up in wage growth and cost pressures showed the U.K. economy is ready for higher rates.

“The message from a number of companies across a number of sectors in Wales was that these pressures to pay-up were mounting — indeed, these pressures had gone up a gear during the course of this year” Haldane wrote in the post published on the BOE’s website. “This evidence adds to my confidence that the economy is experiencing a gradual, on-going firming of pay pressures, with implications for underlying inflation”. The upcoming policy meet update is expected to see a 25 basis point increase, while markets are pricing in a more than 80% chance of such a move. Tuesday sees the latest earnings figures for the UK economy, dropping at 08:30 GMT. Average Earnings including bonuses is expected to grow by 2.5% for the first quarter of 2018, while Average Earnings without bonuses is expected to lift by 2.7%. At the same time, Unemployment readings are expected to remain steady at 4.2%. US calendar will see release of Industrial production data which is expected to turn out positive. Expected support and resistance for the pair are at 1.3225 / 1.3175 and 1.3292 / 1.3325 respectively.