GBP/USD Price Forecast: Bullish Sentiment Brings $1.20 into View

It’s a quiet start to the week for the Pound, with no economic indicators from the UK for the markets to consider. While there are no stats to consider, Bank of England speeches will draw interest.

Early in the European session, Monetary Policy Committee member Michael Saunders will speak at the Resolution Foundation (10am BST).

According to the Resolution Foundation website, Saunders will deliver a speech on “Monetary Policy in Troubled Times and Beyond.”

Expect Pound sensitivity to any views on monetary policy, inflation, and the economic outlook. Saunders speaks ahead of wage growth and employment figures on Tuesday and inflation numbers on Wednesday. Wage growth and consumer prices are the main areas of focus for the BoE.

GBP/USD Price Action

At the time of writing, the Pound was up 0.51% to $1.19272.

This morning, the Pound fell to an early low of $1.18627 before rising to a high of $1.19301.

The Pound broke through the First Major Resistance Level (R1) at $1.1893 and the Second Major Resistance Level (R2) at $1.1919.

Technical Indicators

A GBP/USD hold above R2 would bring the Third Major Resistance Level (R3) at $1.1990. and resistance at $1.20 into play.

The GBP/USD pair would need a continued pickup in appetite for riskier assets to support a breakout from the morning high of $1.19301.

A fall through the Major Resistance Levels and the $1.1848 pivot would bring the First Major Support Level (S1) at $1.1822 in play.

In case of an extended sell-off, the GBP/USD pair could test the Second Major Support Level (S2) at $1.1778 and support at $1.1750.

The Third Major Support Level (S3) sits at $1.1707.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.

At the time of writing, the Pound sat above 50-day EMA, currently at $1.19192.

The 50-day EMA flattened on the 100-day EMA, while the 100-day EMA slipped back from the 200-day EMA: GBP/USD negative.

A hold above the 50-day EMA would support a run at $1.20 to bring the 100-day EMA, currently at $1.20102, into play.

The US Session

It is a quiet day ahead on the US economic calendar. There are no US stats to consider nor any FOMC member speeches to monitor. The lack of stats and Fed chatter could see riskier assets find support should investor jitters over the US economy avoid resurfacing.