Technical Outlook

-GBPUSD is trading about to break below the diagonal support of the bullish channel.

-XAUUSD is in a consolidation state, traders should wait for the price to break above or below the zone.

U.K. Interest Rate Decision

Bank of England (BOE) monetary policy committee members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the GBP, while a lower than expected rate is negative/bearish for the GBP. The U.K Interest Rate Decision was 5% which is 0.25% less than the forecast.

The report is due Thursday, 3rd Aug 16:30 GMT

GBPUSD Technical Analysis:

GBPUSD is in an uptrend forming higher highs and higher lows. The chart shows that the price is trading inside the bullish channel. The 200 and 50MA are above or below the price, meaning all the confluence is with market sentiment being bullish.

The RSI line is at 50.90, signaling neutral overbought and oversold condition. The price recently has tried breaking below the diagonal resistance of the bullish channel but does not seem to have many bears in the market. The market trades between the support of $1.26274 and the resistance of $1.29509. Price has formed its most recent higher low.

Now if the price breaks below the support with a few extra confluence, traders may go against it for a short term, while the recommendation would be trading for BUY and waiting for the price to break and trade above the resistance of $1.29509.

Pivot Points: GBPUSD

U.S. Nonfarm Payrolls

Nonfarm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry. Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity. The previous actual NFP data was 209K which is lesser that the forecast 225K.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

The report is due Friday, 4th Aug 18:00 GMT

XAUUSD Technical Analysis:

Xauusd is in a downtrend when looking at the Daily time frame. With the resistance at a much higher level of $2050.32, the price is trading at $1943.37, approximately 107 pips below. When the price was in bear control, we could see it trading inside the bearish channel with the 50MA above it, signaling a short-term downtrend. However, the 200MA was below the price, telling the trend would increase in Lon-term.

Right after the price broke above the diagonal resistance of the bearish channel, it also broke above the 50MA. Both MAs are trading below the current price, which is going into a consolidation state. The price might trade between $1943.37 and $1984.32, which is a range. The RSI line is at 52.68, showing a slight overbought condition.

Traders must wait for this range to be breached; depending not the direction of the breakout, traders may trade a buy or a sell.

Pivot Points: XAUUSD

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