GBPUSD – Bulls Pause Ahead of Powell’s Remarks

Cable is trading within a narrow range just below a new multi-week high during European trading on Tuesday, as markets anticipate today’s key event – Fed Chair Powell’s testimony.

The long upper shadow of Monday’s daily candle and overbought conditions on the daily chart suggest that bulls may pause around the 1.2800 zone (also the 76.4% Fibonacci retracement of the 1.2860/1.2612 bear-leg).

Bullish studies favor further upside, with consolidation likely to be narrow before the final push towards targets at 1.2860/93 (June 12 high / 2024 top).

Powell’s comments are likely to be dovish, adding to expectations for rate cut plans. However, Thursday’s release of the US June inflation report will play a significant role, as policymakers have reiterated that rate cut decisions will highly depend on economic data.

Initial supports at 1.2788/65 (Monday’s low / broken 61.8% Fibonacci level) should ideally contain, with extended dips not to exceed the daily Kijun-sen (1.2736) to keep larger bulls in play.

Res: 1.2822; 1.2845; 1.2860; 1.2893
Sup: 1.2788; 1.2769; 1.2736; 1.2713