The GBP/USD pair recovered from the yesterday’s low set at 1.5466, with the Pound recovering ground, despite the US rate hike optimism and UK service sector data which resulted worse-than-expected.
As of this writing, the pair is being traded at 1.5515. A major support may be noted near 1.5329, the swing low of the last major dip on daily chart as demonstrated in the following chart. The technical bias will remain bullish as long as the 1.5329 support area is intact.
The 1 hour chart shows that the price is holding above a bullish 20 SMA, whilst the technical indicators are losing their upward strength near overbought territory. In the 4 hours chart, the pair is now above a horizontal 20 SMA, whilst the Momentum indicator is crossing its mid-line towards the upside, showing no actual strength at the time being, but enough to keep the downside limited around the strong static support placed at 1.5456.
The Markit Services PMI fell to 57.4 in July from 58.5 in June, although the most disturbing reading was the employment sub-component showing that hiring hit a 16-month low.
Today the US Bureau of Economic Analysis is due to release the Nonfarm Payrolls during the early New York session. The U.S economy is expected to have added 223,000 nonfarm payrolls in July, enough to allow the Fed to pull the trigger on its first rate hike in nine years. The Fed will consider a possible first rate hike at its Sept. 16 and 17 meeting, but economists say that even with a strong report, it is far from clear cut when the Fed will move off of the zero fed funds target rate it has had in place since late 2008.
Binary Options Trade Idea
Considering the overall technical and fundamental outlook, buying the calls options in cable appears to be a good strategy in short to medium term.