GBP/USD: not ready to break below 1.30 handle yet

GBP/USD has been in consolidation after dropping in European trade and as the FT reported that BoE MPC member Weale .

Last week he suggested he wanted “harder evidence” of Brexit’s impact on the UK economy but he has now “begun to favour immediate” stimulus to boost growth which the markets jumpe don.

As analysts at Scotiabank argued, "last week’s PMI data seem to have convinced him that action is needed sooner rather than later. Some UK banks have begun to warn of the risk of negative deposit rates if the BoE’s key policy rate is lowered further, suggesting commercial banks are prepping for more accommodation in August." While markets attention has been on the UK and tomorrows GDP, markets focus will soon be turning back to the US with the FOMC on the way. 

FOMC meeting: yes, it will be hawkish; no, it won't matter

GBP/USD levels

The analysts at Scotiabank suggest that the market still looks to be consolidating and they continue to think downside risks are quite significant. "We see strong resistance now at 1.3210/20 intraday and continue to see limited upside scope for the GBP in the current environment. Major daily support is 1.2990/00."  Analysts at Commerzbank suggested that the intraday Elliott wave count suggests that the market is not ready to go sub 1.30 yet, "Failure here is needed to trigger a slide to 1.2885/1.2750. Support at 1.2750/78.6% retracement of the move from 1985 to 2007 is regarded as the last defence for the 1.0463 1985 low."