After the sharp fall in GBP/USD we can see bounce back from lower level and from last couple of trading session GBP/USD is trading with positive sentiment and we are expecting positive movement throughout the week.

The 15-min chart is consolidating around 1.1950 which could see a breakout to the upside and towards 1.1980 in the day ahead in order to take out the price within the 1.2000 rally. This will bring the price towards a test the 50 days EMA placed at 1.2100 for the coming days.

The RSI and the Momentum indicator consolidate near oversold readings as the pair develops below firmly bearish moving averages. A potential bullish target and resistance level is 1.2000, but the pair would need to establish itself above 1.2055, a relevant high, to actually have room for a relevant upward extension.

Week ahead: UK inflation in focus

It’s a data-busy week for pound traders, as the UK Employment data will roll out on Tuesday, followed by the critical inflation release on Wednesday. Monday is a quiet day, with no top-tier macro data from both sides of the Atlantic. However, the BOE policymaker Michael Saunders is expected to speak at the Resolution Foundation in London.

The UK inflation data will hold the key for the BOE’s next rate hike plan. The UK CPI arrived at 9.1% YoY in May, a new 40-year high. Meanwhile, the UK political news and the Fed sentiment will continue to influence the pair’s price direction.

Thursday is the European Central Bank (ECB) interest rate decision, which, if creates market volatility, the pound could be impacted by the EUR/GBP cross-driven price swings. The US weekly Jobless Claims will be reported later on Thursday.

The UK Retail Sales, S&P Global/CIPS Manufacturing and Services PMI will drop in on Friday, followed by the US S&P Global/CIPS Business PMIs. It will be a quiet week in terms of the speeches from the Fed officials as the US central bank enters a ‘blackout period’ ahead of the July 26-27 policy meeting.

 Source: forexfactory.com