GBP/USD middles as markets await a reason to move

• GBP/USD traded in a circle on Wednesday, testing 1.2700.
• Key figures for both the US and UK due later in the week.
• GDP updates due on both sides of the Atlantic, US PCE inflation slated for Friday.

GBP/USD treaded water on Tuesday as investors mostly stood pat with a lack of meaningful data to drive market bets in either direction. The pair drifted in a slow circle near the 1.2700 handle, with a data-light Wednesday on the offer for the mid-week market session.

Forex Today: The FX universe remains in waiting mode

Data was notably thin on the Tuesday market session with the UK absent from the data docket and US data strictly mid-tier. The Richmond Fed’s Manufacturing Index declined sharply to -10 in June, down sharply from the previous print of 0 and entirely missing the forecast increase to 2. The CB Consumer Confidence survey index also eased back, but not as much as expected as the sentiment indicator ticked down to 100.4 from the previous 102.0 but stopping just short of the forecast 100.0.

The week’s noteworthy data releases will kick off on Thursday with the Bank of England’s )BoE) latest Financial Stability Report, followed by US Durable Goods Orders and US Gross Domestic Product (GDP) revisions for the first quarter. 

Friday will round out an otherwise low-impact trading week with the UK’s own GDP quarterly revisions, followed by the latest print of the US’ Personal Consumption Expenditure Price Index (PCE) inflation. As one of the Federal Reserve’s (Fed) favored inflation metrics, investors will be looking for a continued cooling in critical US inflation figures to keep the Fed on pace to deliver a first rate cut when the Federal Open Market Committee (FOMC) meets on September 18.

GBP/USD technical outlook

GBP/USD continues to tilt towards the low side as near-term price action gets hung up on the 200-hour Exponential Moving Average (EMA) near 1.2693. The 1.2700 handle is proving too tough of a barrier for bulls to crack on intraday charts, and a continued softening of upside momentum could drag the pair into fresh July lows below 1.2630.

Daily candlesticks remain mired in technical congestion at the 50-day EMA near 1.2673, and the Cable continues to trade on the low side of a supply zone priced in above 1.2800.

GBP/USD hourly chart

GBP/USD daily chart