In the Asian session, the GBP/USD pair is consolidating in a narrow trading range of 1.1420 to 1.1490. The asset is predicted to fall further to hit the round-level support of 1.1400, as a correction was widely anticipated following a ferocious rise. However, the corrective move is projected to be minor and will not affect the bullish bias over a longer period.

In general, the pound bulls are performing quite well following the UK administration’s retraction of the memorandum of tax cuts to support households against bumper salaries. Market think tanks criticized the plan to reduce taxation since it was projected to increase inflationary pressures sharply. Furthermore, the tax cut was causing a conflict of interest, as the Bank of England (BOE) is constantly raising interest rates to combat rising inflation. The rollback decision has emphasized that the UK economy would require time to become politically stable after Liz Truss becomes Prime Minister.

Meanwhile, the US dollar index (DXY) returns after defending the important support level of 110.00. Because of the lack of strength, the rebound move appears less trustworthy and will end sooner. In the future, the US ISM Services PMI statistics will take center stage. Because consumers have delayed their demand for durable goods, economic statistics are projected to show a fragile performance. The Services PMI is predicted to fall to 56.0 from 56.9 in the previous report. In addition, the New Orders Index, which reflects future service demand, will fall to 58.9 from 61.8 in the previous quarter.

Later today, the investor’s focus will stay on the US ADP Non-Farm Employment Change which is expected to be 200K vs. 132K beforehand and may drive bearish bias for the GBP/USD pair.

GBP/USD Technical Outlook

The GBPUSD pair continues to rise, surpassing the 1.1365 level and confirming the path to more gains on an intraday and short-term basis. For now, it’s facing an immediate resistance near the $1.1487 level, and a breakout above this may open the way to 1.1500, our next main target.

To continue suggesting the bullish trend for the rest of the day, it’s important for GBP to stay above 1.1305, as breaking it may push the price to test the key support of 1.1186 before any new attempt to rise.
Today’s trading range is predicted to be between 1.1300 support and 1.1480 resistance.

Today’s projected trend: Bullish