• GBP/USD hovered near two week high on Monday as market awaited key job and growth data later this week, following the BoE’s narrow rate cut decision on Thursday.
•Economists surveyed expect Tuesday’s data to show unemployment steady at 4.7% for the three months to June. Thursday’s preliminary growth data is forecasted to show GDP slowing to 0.1% in Q2, down from 0.7% in Q1.
• Last week, the BoE cut the Bank Rate by 25 bps to 4%, but four of nine MPC members voted to keep rates unchanged.
• The BoE has cut rates more slowly than the ECB, easing about once per quarter since mid-last year amid persistent inflation concerns.
• Looking ahead, U.S. inflation data is due on Tuesday, a key determinant for the Federal Reserve’s interest rate decision next week.
• Immediate resistance is located at 1.3492(50%fib), any close above will push the pair towards 1.3635(38.2%fib)
• Strong support is seen at 1.3388 (SMA 20) and break below could take the pair towards 1.3345(61.8%fib).
Recommendation: Good to buy around 1.3410 with stop loss of 1.3350 and target price of 1.3470
