Breakout Imminent as Tests Resistance

The GBP/USD pair has been in a strong bullish trend in the past few days.

• Buy the GBP/USD pair and set a take-profit at 1.2900.
• Add a stop-loss at 1.2800.
• Timeline: 1-2 days.

• Set a sell-stop at 1.2815 and a take-profit at 1.2715.
• Add a stop-loss at 1.2915.

The GBP/USD price is sitting at an important resistance level ahead of the upcoming Mansion House speech by Jeremy Hunt, the Chancellor of the Exchequer. It also jumped after last Friday’s soft jobs report from the United States. It was trading at 1.2850, the highway point in June.

There will be no US and UK economic data on Monday. Instead, traders will focus on several speeches by UK and US policymakers. Jeremy Hunt, the governor of the exchequer will deliver a speech focused on capital market rules and pension reforms. The statement will likely have no major impact on the sterling.

Several American Fed officials will deliver statements later on Monday. They include Mary Daly, Raphael Bostic, and Loretta Mester. These statements will be important since they come two days after the US published soft jobs numbers.

Data by the Bureau of Labor Statistics differed greatly from those published by ADP on Thursday. ADP’s report showed that the America’s private sector added over 400k jobs in June, the highest level in months.

On the other hand, a report by the Labor Department revealed that the labor market was softer than estimates. The economy added over 209k jobs in June, lower than the expected 230k. The department also revised May’s estimates downwards as well.

Therefore, there are signs that the labor market is softening even as the unemployment rate dropped to 3.6% in June. Still, there is a likelihood that the Fed’s hawkish tone will continue in the coming months. Fed minutes revealed that officials were generally supportive of two more 0.25% hikes.

The GBP/USD pair has been in a strong bullish trend in the past few days. This rebound accelerated after the US jobs report. As it rose, it moved to the resistance level at 1.2850, where it has struggled to move above in the past few weeks.

The pair’s bullish trend is being supported by the 25-day and 50-day moving averages. Most importantly, sterling has formed a double-top pattern, which is usually a bearish sign. Its neckline is at 1.2591. It has also formed a small inverted head and shoulders pattern.

Therefore, there is a possibility that the pair will continue rising if bulls manage to push it above the key resistance point at 1.2900.

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