GBP/USD - Will it rebound from 100-DMA?

GBP/USD weakened 0.10% in Asia to 1.2912. The dip below 100-DMA seen yesterday was short lived as the currency pair quickly recouped losses to end the day with moderate gains at 1.2924. The 100-DMA is seen today at 1.2906 levels. 

Eyes US data

The UK calendar is empty, hence the focus is on US personal spending and income report and Fed’s preferred measure of inflation - the core PCE index. Personal spending is seen rising 0.4% in July, while the core PCE is expected to come-in at 1.4%. 

A better-than-expected core PCE data could yield a sustained break in the GBP/USD below the 100-DMA level of 1.2906. On the other hand, an end of the day close above 1.2962 [50-DMA + 38.2% Fib R of Aug high - Aug low] cannot be ruled out if the core PCE misses estimates by a big margin. 

GBP/USD Technical Levels

Gregor Horvat from EW-Forecast writes, “GBPUSD is turning up, but only for a three-wave correction viewed as blue wave two. We expect a bounce in three waves, as A-B-C rally up to 1.3032 resistance area from where new turn lower may occur later this week.”