GBP/USD Heading North to Retest $1.2050 Mark – Eyes on BOE Gov Bailey Speech

Following bids below 1.2000 in the early Asian session, the GBP/USD pair has recovered strongly. The cable GBP/USD has stayed in the hands of bulls despite a risk-on market drive that has increased the attractiveness of risk-perceived assets.

The pound bulls remained active on Tuesday despite the announcement of weak UK employment figures. The unemployment rate held steady at 3.8 percent. Nevertheless, the Claimant Count Change fell to 20K from -34.7k in the previous release.

The market’s investors are haunted by the disappointing average hourly earnings, which fell to 6.2 percent from 6.9 percent expected and 6.8 percent previously released, a drop of 6.2 percent. The investment community knows that the UK economy is being buffeted by greater pricing pressures caused by rising energy and food prices. As a result, lower profitability and price pressures will negatively impact market participants’ sentiment.

Furthermore, the US dollar index (DXY) is expected to fall more in July as inflation forecasts fall further due to low oil prices. At its July monetary policy meeting, this lowered expectations for a 1% rate hike by the Federal Reserve (Fed).

Today’s session will be dominated by the UK Consumer Price Index (CPI) announcement. The economic statistics are expected to be 9.3 percent, up from 9.1 percent in the previous publication. The core CPI, which excludes oil and food, is expected to fall by ten basis points to 5.8 percent of the prior estimate.

GBP/USD Technical Outlook

The GBP/USD pair successfully reached our anticipated target of 1.2025. They encountered solid resistance there, and according to the trading rules within the channels, the price began to bounce back bearishly and build a new bearish wave, on its way to 1.1870 and 1.1760 levels as the next negative stations.

As a result, technical indicators foresee further declines in the following sessions unless the price can break and hold above 1.2010. Today’s trading range is predicted to be between 1.1850 support and 1.2010 resistance.

Today’s projected trend is bearish.