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GBP/USD Price Forecast: A Return to $1.2350 Brings $1.240 into Play

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It is a quiet start to the week on the UK economic calendar for the Pound. Following inflation, private sector PMI, and retail sales figures from last week, there are stats to provide the Pound with direction.

The lack of stats will leave the Pound in the hands of market risk sentiment and news updates from the G7 Summit.

On the monetary policy front, no Bank of England MPC members are due to deliver speeches today. Andrea Rosen and Jon Cunliffe will speak tomorrow.

GBP/USD Price Action

At the time of writing, the Pound was up 0.41% to $1.23222.

A bullish start to the day saw the Pound rise from an early low of $1.22588 to a high of $1.23320.

The Pound broke through the First Major Resistance Level at $1.2315.

GBPUSD 270622 Daily Chart
GBPUSD 270622 Daily Chart

Technical Indicators

The Pound will need to avoid the First Major Resistance Level and the $1.2278 pivot to target the second Major Resistance Level at $1.2358.

A pickup in market risk appetite would support a breakout from the morning high of $1.23320

An extended rally would test resistance at $1.24. The Third Major Resistance Level sits at $1.2439.

A fall through the First Major Resistance Level and the pivot would bring the First Major Support Level at $1.2235 into play.

Barring an extended sell-off, the Pound should steer clear of sub-$1.22 and the Second Major Support Level at $1.2197. The Third Major Support Level sits at $1.2117.

GBPUSD 270622 Hourly Chart
GBPUSD 270622 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.

At the time of writing, the Pound sat at the 100-day EMA, currently at $1.23157. The 50-day EMA narrowed to the 100-day EMA. The 100-day EMA closed on the 200-day EMA: GBP/USD positive.

A return to $1.2350 would support a run at the 200-day EMA, currently at $1.24127.

In case of a GBP/USD fall through the 50-day EMA, the Pound would likely test support at $1.22.

GBPUSD 270622 4-Hourly Chart
GBPUSD 270622 4-Hourly Chart

The US Session

Economic data from the US include durable and core durable goods orders. The markets will be looking for any weak numbers that could raise further concerns over the economic outlook.

This article was originally posted on FX Empire

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