- GBP/USD slips to $1.3808 as BOE credit survey reports increased unsecured loans.
- U.K. employment figures perform well, Average Earning Index from the U.K. rose to 7.3%, and Claimant Count Change fell to -114.8K.
- GBP/USD is consolidating in a broad trading range of 1.3860 – 1.3804, breakout-eyed.
The GBP/USD pair closed at $1.3828 after placing a high of $1.3900 and a low of $1.3805. GBP/USD currency pair dropped amid the strength of the U.S. dollar. Despite hawkish comments from a member of MPC from the Bank of England, the currency pair remained depressed throughout the day.
BOE Credit Survey is Out – Lenders to Increase Unsecured Credit
The Bank of England credit conditions survey, conducted between June 1 and June 18, showed that the U.K. lenders had the plan to increase the availability of unsecured credit to households in the third quarter.
The Bank said that the availability of unsecured credit was already high in three months to May and was set to rise further over the next three months to end in August. Similarly, the demand for lending also increased in the second quarter and was forecasted to grow in the coming quarter.
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Optimistic Labor Market Figures Underpins the Cable (GBP/USD) at $1.3820
On the data front, at 11:00 GMT, the Average Earning Index from the U.K. rose to 7.3% against the forecasted 7.1% and supported the British Pound and further caped loss in GBP/USD. The Claimant Count Change came in as -114.8K against the projected -32.5K to support the British Pound and limit the decline in GBP/USD pair.
In May, the Unemployment Rate from the U.K. rose to 4.8% against the predicted 4.7% and weighed on the British Pound. At 18:30 GMT, the C.B. Leading Index remained flat at 0.6%.
From the U.S. side, at 17:30GMT, the Philly Fed Manufacturing Index declined to 21.9 against the estimated 28.1 and weighed on the U.S. dollar. The Unemployment Claims from last week rose to 360K against the predicted 350K. Both of the indicators weigh on the U.S. dollar.
The Capacity Utilization Rate also fell to 75.4% against the projected75.7%. Whereas the Empire State Manufacturing Index increased to 43.0 versus the forecasted 17.9. The economic figures supported the U.S. dollar and added further losses in GBP/USD.
The U.S. dollar was strong on board despite dovish comments from Jerome Powell in his second day of testimony before the House of Representatives. He repeated that the Bank would continue to support the economy as the spike in inflation was transitory.
MPC Member Michael Saunders Spits Hawkish Remarks, Boosting Sterling Demand
On the other hand, MPC member Michael Saunders said that it might become appropriate soon to reduce some of the stimulus provided for supporting the economy. Such a comment from Saunders prompted immediate speculation that the MPC might be preparing for an early drawback of its Q.E. program as expected to meet next month.
According to Saunders, the activities recorded in May were somewhat faster than the forecasts made by the Central Bank. In response, one course of action could be a call to the early winding up of the Q.E. Program.
GBP/USD was closed at $1.3828 after placing a high of $1.3900 and a low of $1.3805. GBP/USD currency pair dropped on Thursday amid the comeback in the strength of the U.S. dollar. Despite hawkish comments from a member of MPC from the Bank of England, the currency pair remained depressed throughout the day.
GBP/USD Forecast: Upward Trendline & Double Bottom Supports at $1.3800
GBP/USD 4-Hour Chart
Support Resistance
1821.40 1835.80
1813.80 1842.60
1807.00 1850.20
Pivot Point: 1828.20
GBP/USD Forecast – Technical Analysis: Eyes on $1.3800
GBP/USD forecast is a bit neutral today as the pair is consolidating in a broad trading range of 1.3860 – 1.3804.
On the 4-hour timeframe, the Cable has closed a symmetrical triangle pattern. This pattern indicates indecision among investors and provides support at 1.3804. In contrast, the resistance stays at the 1.3867 level.
A breakout of an upward trendline or a symmetrical triangle pattern on the downside can lead Sterling towards the triple bottom level of 1.3756.
The 50 periods EMA (exponential moving average – red line) is holding steady at 1.3835, along with the MACD that’s closing histograms below 0. Both of the technical tools are supporting a selling bias in the GBP/USD pair.
The GBP/USD price forecast is neutral today. However, forex trading participants may look for a breakout opportunity. Selling trades can be captured below 1.3800 level with a target of 1.3750 level today. All the best.
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