Will the pound’s rally, which has gained momentum ahead of tomorrow’s employment report, continue?

Will the pound’s rally, which has gained momentum ahead of tomorrow’s employment report, continue?

18.07.2022

Last weekend, the U.S. dollar fell against the euro as the Dollar Index, which had risen to the high 108s, pulled back to 107.9. The EUR/USD pair rebounded by about 90 pips from 1.0005 to 1.0095, showing a recovery from below parity.From a technical perspective, the EUR/USD has broken above the 20-period moving average (MA) on the 4-hour chart with a real body, and the 4-hour RSI is hovering around 54, just shy of 70. Therefore, we will be watching closely to see if it can extend its gains toward the recent high of 1.0182.

Among European currencies, the pound rose as it rebounded against the weakening U.S. dollar, with the GBP/USD pair climbing approximately 70 pips from 1.1805 to 1.1875.The pair continued to rebound during today’s Asian trading session, climbing as high as 1.1906. However, resistance from the 200-period simple moving average (SMA) looms above on the hourly chart, and since the pair has continued to decline without breaking above the hourly 200-SMA since June 28, traders should remain cautious of another downward reversal.

Today, at 18:00 European time, MPC member Saunders of the UK will speak; around 20:00, Bank of America will report its second-quarter earnings;around 21:00, Bank of America’s second-quarter earnings; at 21:15, Canada’s housing starts; at 23:00 U.S. time, the U.S. NAHB Housing Market Index; and at 29:00, U.S. securities investment data.With tomorrow’s employment report on the horizon, we’ll be watching closely to see if the pound’s recent rebound will continue.