Last week’s trading session was one of the most volatile markets in trading history after China’s stocks crashed which fueled tremendous momentum in the FOREX market. The GBP/USD pair rose as high as 1.5817 last week but later formed resistance and dropped sharply since then, closing lower at the end of the week’s trading session. The development suggests that the corrective pattern from 1.5329 has completed with three waves up to 1.5817.
The pound’s gains were limited as demand for the greenback remained broadly supported after data on Thursday showed that U.S GDP grew at an annual rate of 3.7% in the three months ending June 30, above expectations for growth of 3.2%, fueling more speculation over a possible September rate hike.
Initial bias remains on the downside this week for 1.5329 first. Break will resume the fall from 1.5929 and target 100% projection of 1.5929 to 1.5329 from 1.5817 at 1.5217. Break will target 1.5087 support. On the upside, above 1.5508 minor resistance will turn bias neutral first. But risk will now stay on the downside as long as 1.5817 resistance holds.
Later in the week all eyes would be upon U.S data such as ISM Manufacturing PMI, ADP Non-Farm Employment Change, Non-Farm Employment Change and Unemployment Rate. Outcome of this data would determine if the Feds are going to be hiking Interest Rate in the month of September. However GBP data such as Manufacturing PMI, Service PMI, would not be over looked.