Signal price

Risk sentiment to test buyers at $1.18

It’s a quiet day for the Pound, with no UK economic indicators for the markets to consider.

The lack of statistics will leave the pound in the hands of market risk sentiment throughout the day.

Although there are no economic indicators to consider, speeches from the Bank of England will generate interest. Jon Cunliffe, member of the Monetary Policy Committee, will speak later today.

Cunliffe is due to deliver a keynote address ahead of a conversation with Perry Warjiyo, Governor of Bank Indonesia, at the Indonesian Digital Economy and Finance Festival “A Vision for Future Digital Cross-Border Payment”.

However, comments on the UK’s economic outlook and monetary policy are unlikely, with the focus on cross-border digital payments.

GBP/USD rate

At the time of this writing, the pound was down 0.41% at $1.18408.

This morning, the pound hit an early high of $1.18925 before sliding to a low of $1.18354.

The pound left major support and resistance levels untested early on.

GBPUSD 140722 Daily Chart

Technical indicators

A move through the $1.1894 pivot would bring into play the first major resistance level (R1) at $1.1962 and Wednesday’s high at $1.19668.

GBP/USD would need a sharp rally in risk sentiment to support a break from $1.1950.

In the event of an extended rally, GBP/USD would test the second major resistance level (R2) at $1.2034.

The third major resistance level (R3) is located at $1.2174.

Failure to go through the pivot would leave the first major support level (S1) at $1.1822 in play.

In case of prolonged selling, the GBP/USD pair could test the support at $1.18 and the second major support level (S2) at $1.1755.

The third major support level (S3) is located at $1.1615.

GBPUSD 140722 Hourly Chart

Looking at the EMAs and the 4 hour candlestick chart (below), this is a bearish signal.

At the time of writing, the Pound was trading below the 50-day EMA, currently at $1.19606.

The 50-day EMA fell against the 100-day EMA, with the 100-day EMA falling against the 200-day EMA: GBP/USD negative.

A move through the 50-day EMA and the R1 would target the R2 and the 100-day EMA, currently at $1.20538.

GBPUSD 140722 4 hour chart

The American session

Weekly jobless claims and headline inflation numbers are due later in the day. The statistics will be of interest after consumer price inflation picks up in June.