Fundamental analysis of GBP/USD

The day is quiet for the GBP/USD pair as economic data on the UK has no impact on the market. In addition to the situation in the UK, markets are waiting for news on US Treasury Secretary Janet Yellen's trip to Beijing, which is generally assessed as optimistic. His comments about the 10-hour face-to-face and productive meeting are encouraging. Meanwhile, the US economic calendar is also forecasting quiet days. Following the release of the latest labor market and service sector data, today's speeches by FOMC members Barr, Bostic, Daly and Mester will draw attention. Speculation of consecutive rate hikes in July and September will help gauge market reaction. 

 The US jobs report did not have a significant impact on Fed policy sentiment due to the number of non-farm payrolls, but future remarks from Fed officials may influence market sentiment going forward. On Wednesday, the US CPI report will be released. The US Dollar Index declined, meeting significant resistance around 102.50. After the release of the US Non-Farm Payrolls data, investors' attention shifted to the Consumer Price Index, which is due to be released on Wednesday.

Amid the maximum decline in demand in the last 14 years, the burden on households due to high inflation is growing. Despite efforts by the Bank of England and British diplomats to curb inflation, UK inflation shows no signs of slowing down. Therefore, Bank of England Governor Bailey's speech will be closely scrutinized for inflation and interest rate policy recommendations.  Of great interest to investors are the labor market data, especially the dynamics of the number of candidates and unemployment rate. 

Technical analysis and scenarios:

Stochastic oscillator shows a value of 63.4137 against a signal value of 71.6338, suggesting that the pair may be slightly overbought but not yet in an extreme range. MACD with a value of 0.003333 above its signal line at 0.002458 also hints at bullish momentum. Moreover, the price is trading in the upper range of Bollinger Bands and the indicator is pointing upwards, suggesting a continued uptrend.

Main scenario (BUY)

Recommended entry level: 1.28500.

Take Profit: 1.29000.

Stop Loss: 1.28200.

Alternative scenario (SELL)

Recommended entry level: 1.27480.

Take Profit: 1.26450.

Stop loss: 1.28000.