The US dollar took a bullish ride to trade near a two-week high against key peers. The bullishness was triggered ahead of a European Central Bank policy meeting on Thursday. There’s a strong sentiment that the European Central Bank will keep the interest rates on hold. In addition to this, the ECB can also exhibit a dovish tone considering worse than expected economic events from the Eurozone.

Investors will focus on the data from Britain, especially BOE Mark Carney’s speech and UK Services PMI will remain in the limelight today.

Key Economic Events Today

GBP – Services PMI

The Markit is due to release services PMI figures at 9:30 (GMT) with a forecast of 50 vs. 50.1. To recall, it’s a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The number is already touching the 50 thresholds, is it gonna fall further? A contraction in the services sector could reflect mounting fears of Brexit and the Bank of England will be forced to keep the monetary policy steady.

BOE Gov Carney Speaks

On the other hand, the BOE Governor Mark Carney is due to testify on Brexit, inflation, and the economy before the House of Lords Economic Affairs Committee, in London at 15:35 (GMT). Investors should follow the event to drive sentiments about the upcoming monetary policy event.

GBP/USD Breaks out of the Bullish Channel

On the 3 hour chart, the overbought GBP/USD has completed 50% Fibonacci retracement at 1.3175 and it’s consolidating right below this level now. Earlier it looked like the pair is going to take a U-turn but then it formed a bearish engulfing pattern. The pattern is signifying a strong bearish power, indicating the market is still dominated by sellers.

Technically, GBP/USD is likely to face a strong resistance near 1.3200, which is extended by the 50 periods exponential moving average on the 3-hour chart. On the lower side, the pair can go after $1.3100.

Daily Technical Levels
Support Resistance
1.3145 1.3234
1.3111 1.3289
1.3023 1.3377
Key Trading Level: 1.32

GBP/USD – Trade Plan

Today, $1.3190 is a crucial level for Sterling, and I will consider staying bearish below this to target $1.3115.

Good luck!