The GBP/USD traded in a side way range bound markets during today’s trading session even after data revealed the U.K. economy grew less than markets were expecting in the first quarter. Recent upbeat economic indicators have fueled expectations that the Bank of England could raise interest rates in the early part of next year, propelling sterling to multi-year highs against the dollar.
Earlier Tuesday, BoE Governor Mark Carney said the U.K. recovery is starting to “broaden” but added that the bank still sees plenty of slack in the labor market.
Intra-day bias remains mixed in the pair as the pair was likely to find support at 1.6778, Monday’s low, and resistance at 1.6857, Monday’s high. I recommend a breakout of this range before making any trading decisions. However if you feel like picking a direction, i would recommend shorting the pair with a conservative lots size and placing stops at 1.68448 with take profit at 1.67919.
On Wednesday, the U.S. is to release preliminary data on first quarter GDP, as well as the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on manufacturing activity in the Chicago region.
Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement.