The GBP/USD pair continues to gain positive traction, reaching a daily peak around 1.2775-1.2780 during the Asian session on Tuesday. Despite remaining within the previous day’s trading range, traders are eagerly anticipating key macroeconomic data from the UK and the US that could influence the pair’s direction.
Later today, the UK will release its monthly employment report and the US will publish the Producer Price Index (PPI). These releases will be followed by consumer inflation figures from both countries on Wednesday and the Preliminary UK Q2 GDP on Thursday. These data points will play a crucial role in shaping market sentiment towards the British Pound (GBP) and providing a clear direction for the GBP/USD pair.
Concerns about the Bank of England (BoE) potentially lowering borrowing costs further this year, coupled with expectations of larger rate cuts by the Federal Reserve (Fed), are impacting the GBP and USD, respectively. As a result, caution is advised when considering bullish bets on the GBP/USD pair.
Technically, spot prices have shown resilience below the 100-day Simple Moving Average (SMA) and rebounded from a one-month low near 1.2665. With oscillators now neutral on the daily chart, there is potential for further upside. However, a sustained break above the 1.2800 level is needed to confirm a bullish outlook.
Economic Indicator: Claimant Count Change
The Claimant Count Change, released by the UK Office for National Statistics, measures the change in the number of unemployed individuals in the UK claiming benefits. This data point can impact GBP volatility, with a higher reading indicating negative implications for consumer spending and economic growth. A high reading is typically bearish for the Pound Sterling (GBP), while a low reading is seen as bullish.
Overall, the ongoing developments in the UK and US economies, as well as central bank policies, will continue to influence the performance of the GBP/USD pair. Traders should closely monitor upcoming data releases and market sentiment to make informed decisions regarding their investments and trading strategies.