GBP/USD Daily Price Forecast – The Cable may Dip Further Ahead of PPI & Jobless Claims Data

The primary trend for the Cable remains consolidation for the Asian trading session. The pair had attempted to breach the strong 1.3026 resistance levels, two days in a row. The GBP/USD pair seems to be consolidating around 1.3010 levels.

The critical point to note is that the GBP/USD pair had been tumbling since last few sessions. The fall had initiated from around 1.3140 levels, which halted for a while near 1.3080 levels.  

Brexit Status Quo

Sir Graham Brady who represents the backbench Tory MPs earlier anticipated a response over his query on May’s stepdown. The MPs want the Prime Minister to come down from her role irrespective of Brexit outcome. Theresa May remains apathetic to Sir Brady. She instead stays focused on attempting for the fourth time to unlock Brexit deadlock.  

May want the Britain-EU divorce to happen to the earliest, precisely before the EU elections on May 23.

Over to the cross-party side, there appears less or no progress. Both the Conservative and the Labor party representatives continue to argue over how to leave the Bloc. This uncertainty has weakened the Pound Sterling making it fragile and sensitive. The pair may suffer significant volatility as a consequence of any positive/negative update on that front.

The U.S. Dollar Index that computes the Greenback against the six significant rivals had slid 0.08% down in the morning hours. Laterwards, a strong upshift was observed in the index making it reach near 97.60 levels.

GBP/USD Significant Events

There are no GBP-specific events scheduled during the day.

However, the Cable may find some radical movements after the release of the U.S. April Producer Price Index (PPI). The market remains slightly bearish over the figures, expecting a 0.1% decrease this time.

At around 12:30 GMT, the U.S. Department of Labor will come up with the latest Jobless Claims numbers. The street analysts stay highly bullish on these unemployment figures this time.

In the same time frame, Investors also anticipate for Fed’s Chair Powell speech.  

Technical Analysis

1-Hour Chart

The Bollinger Bands (BB) gives a bullish indication. The GBP/USD pair was hovering above the EMA. Moreover, BB has narrowed, which refers to high volatility. The significant 50-day SMA stood above the 200-days SMA. However, all the major SMAs remained above the Cable. In the near term, the pair seems to set a bearish stance.

4-Hours Chart

At 05:00 GMT, the Cable was trading near 1.3014 levels. The Cable remained within the lower vicinity of the Keltner Chanel (KC) waking up the bears. The KC configured with 20-day simple moving average and multiplier 2 ATR, referred a bearish outlook. Furthermore, the RSI has crossed 40 levels and hovered around 39.