GBP to USD Forecasts: Bulls Target $1.25 on BoE Chatter and US Stats

It is a quiet day ahead for the GBP/USD. There are no UK economic indicators to influence the GBP/USD.

The lack of stats will leave the GBP/USD in the hands of market risk sentiment early in the day. However, Bank of England and MPC member commentary will move the dial later today.

With the economic calendar on the light side, investors should track BoE member commentary. Bank of England Chief Economist Huw Pill and MPC member Silvana Tenreyro are delivering speeches today. We expect Huw Pill to garner more interest.

Recent economic indicators support a more hawkish BoE, with inflation accelerating in February. Comments relating to the OPEC cut in supply and the impact on energy prices and inflation will also need consideration.

GBP/USD Price Action

This morning, the GBP/USD was down 0.04% to $1.24050. A mixed start to the day saw the GBP/USD rise to an early high of $1.24256 before falling to a low of $1.23985.

Technical Indicators

The Pound needs to avoid the $1.2369 pivot to target the First Major Resistance Level (R1) at $1.2464. A move through the morning high of $1.24256 would signal an extended breakout session. However, the Pound would need hawkish BoE chatter and weak US economic indicators to support a breakout session.

In the event of an extended rally, the GBP/USD would likely test the Second Major Resistance Level (R2) at $1.2519. The Third Major Resistance Level sits at $1.2668.

A fall through the pivot would bring the First Major Support Level (S1) at $1.2315 into play. However, barring a risk-off-fueled sell-off, the GBP/USD should avoid sub-$1.23 and the Second Major Support Level (S2) at $1.2220. Third Major Support Level (S3) sits at $1.2070.

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The GBP/USD sits above the 50-day EMA, currently at $1.23164. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1.23164) would support a breakout from R1 ($1.2464) to target R2 ($1.2519). However, a fall through the 50-day EMA ($1.23164) and S1 ($1.2315) would bring sub-$1.23 and S2 ($1.2220) into view. A fall through the 50-day EMA would send a bearish signal.

The US Session

Looking ahead to the US session, it is a relatively busy day on the US economic calendar. The US JOLTs Job Openings report and factory orders will be in focus. However, barring a sharp decline in factory orders, the JOLTs Job Openings report should have more impact ahead of the ADP nonfarm employment change (Wed) and US Jobs Report (Fri).

Investors should also monitor Fed chatter on monetary policy and the US economy.