GBP/USD Price Forecast: BoE Member Chatter to Test the Pound

Following Tuesday’s sell-off, it’s a quiet day ahead for the Pound, with no major stats to consider on the UK economic calendar.

The lack of stats will leave monetary policy in focus, with Monetary Policy Committee member Jon Cunliffe and the Bank of England Chief Economist Huw Pill due to speak today.

With investor fears of a recession hitting the European markets on Tuesday, expect GBP/USD sensitivity to any chatter on the economic outlook and monetary policy.

GBP/USD Price Action

At the time of writing, the Pound was up 0.19% to $1.19646.

This morning, the Pound rose to an early high of $1.19718 before falling to a low of $1.19109.

The Pound left the Major Support and Resistance Levels untested early on.

Technical Indicators

A GBP/USD move through the $1.1988 pivot would bring the First Major Resistance Level (R1) at $1.2078 into play.

However, the markets will need to shift away from recession fears for the Pound to return to $1.20.

An extended rally would test resistance at $1.21 but likely fall short of the Second Major Resistance Level (R2) at $1.2215. The Third Major Resistance Level (R3) sits at $1.2442.

Failure to move through the pivot would bring the First Major Support Level (S1) at $1.1852 into play.

In the event of another extended sell-off, the GBP/USD pair could test support at $1.18 and the Second Major Support Level (S2) at $1.1762. The Third Major Support Level (S3) sits at $1.1535.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.

At the time of writing, the Pound sat below 50-day EMA, currently at $1.23996.

The 50-day EMA fell back from the 100-day EMA. The 100-day EMA eased further back from the 200-day EMA: GBP/USD negative.

A move through R1 would support a run at the 50-day EMA.

However, following the Wednesday GBP/USD fall through the 50-day EMA, the Pound will need to move through the pivot to avoid testing support at $1.18.

The US Session

ISM Non-Manufacturing PMI and JOLT’s job openings are due out today. Following the market reaction to the ISM Manufacturing PMI numbers, the Non-Manufacturing PMI will have more influence on the GBP/USD pair. Weak numbers will test support for riskier assets and the GBP/USD.

However, of greater influence will likely be the FOMC meeting minutes due out late in the US session.