GBP/USD holds daily gains above 1.32 ahead of 'Super Thursday'
The GBP/USD pair is preserving its daily gains above the 1.32 handle on Wednesday ahead of tomorrow's important BoE meeting. As of writing, the pair was trading at 1.3235, gaining 28 pips, or 0.21% on the day.
After spending the Asian session quietly around the 1.32 mark, the pair gained traction during the European trading hours and touched its session high at 1.3245. Although the pair struggled to extend its gains, it's still looking to close the day higher for the fourth time in a row. Today's data from the U.S. couldn't meet the market expectations as the ADP private employment growth came in at 178K in July but failed to weigh on the greenback as June's data was revised up to 191K from 158K. At the moment, the US Dollar Index is at 92.75, down 0.15% on the day.
On Thursday, the BoE is going to announce its monetary policy meeting decisions. Although markets expect no changes in the policy, the number of votes for a rate hike could impact the GBP demand. "The combination of the sluggish USD and the possibility that 2 or 3 MPC members will continue to state a preference for an immediate rate rise in the coming months should continue to offer GBP/USD support," Jane Foley, Senior FX Strategist at Rabobank, argued in a recent report.
- BoE: Expect only two votes for a rate hike at this week's meeting - HSBC
Technical outlook
The RSI on the daily graph is moving slightly above the 70 mark, suggesting that the pair could have a difficult time extending its gains in the short-term. 1.3245/1.3250 (daily high/Sept. 16 high), 1.3300 (psychological level) 1.3345 (Sept. 12 high) could be seen as technical resistances. On the downside, supports align at 1.3200 (psychological level), 1.3100/1.3095 (psychological level/Jul. 31 low) and 1.3000 (Jul. 26 low).
- GBP/USD neutral/bullish near term – Scotiabank