GBP/USD: Further upside likely ahead of BOE, NFP week?

Amid renewed demand for the US dollar across the board, the GBP/USD pair suffered minor losses in the Asian session, with the bulls slightly on the back foot ahead of the key events for this week - BOE policy decision and US payrolls data.

GBP/USD: Will it regain 1.3160 this week?

The bears continue to guard 1.3150-60 barrier stepping into a brand new week, keeping the GBP/USD pair on the defensive. The bulls remain cautious ahead of the BOE monetary policy decision due later in the second-half this week.

Markets are pricing-in a dovish outcome from the BOE’s ‘Super Thursday’, given that inflation continues to overshoot the central bank’s 2% price target, weighing down on the odds for a rate hike this year.

The downside, however, may remain cushioned, as the US dollar is likely to extend its recent run of losses, in the wake of softer the US GDP and employment cost data, while US political uncertainty and less hawkish Fed will also add to the negative tone around the buck.

Ahead of the BOE event, the spot will take cues from a slew of PMI reports from the UK economy, while the US ISM manufacturing PMI and ADP jobs report will also have a strong bearing on the GBP/USD price-action. Also, geopolitical developments surrounding North Korea will be closely eyed.

GBP/USD levels to consider             

“From a technical point of view, the daily chart shows that the price is well above a bullish 20 SMA, while the RSI turned hither around 64 and the Momentum keeps consolidating within positive territory, favoring additional gains on an acceleration through 1.3160. In the 4 hours chart, technical indicators eased modestly within bullish territory, but the price also holds above a bullish 20 SMA, all of which limits chances of a steep decline ahead. Support levels: 1.3100 1.3060 1.3020 Resistance levels: 1.3160 1.3200 1.3250,” Valeria Bednarik, Chief Analyst at FXStreet explains.