GBP/USD Price Analysis – July 25, 2023
Daily Price Outlook
During Tuesday's Asian trading session, the sterling pair has gained 0.24%, trading around 1.2863.
The market is acting cautiously because of Wednesday's Federal Open Market Committee (FOMC) meeting.
July marked a five-month low for business activity in the United States. There was a fall from 53.2 to 52 in the S&P Global Composite PMI. The rise in the US S&P Global Manufacturing PMI from 46.3 to 49 was better than expected.
The Services PMI dropped from 54.4 to 52.4, below the consensus forecast of 54, and the Composite PMI also dropped from 53.2 to 52.
Some have speculated that the Federal Reserve may soon stop tightening monetary policy in response to recent economic statistics showing inflation is slowing and the labour market is tight.
Speculation is high that the Federal Open Market Committee will raise its benchmark rate by another quarter point at its meeting on Wednesday. However, Fed Chairman Jerome Powell will provide some hints about the potential for interest rate guidance during his news conference on Wednesday. The Fed's hawkish approach can set off the US dollar.
However, preliminary data from the UK's PMI indicated that economic activity in July was worse than anticipated. In July, the Manufacturing PMI dropped to 45.0 from June's 46.5, below the forecasted 46.1. This number marked the 12th consecutive month of industrial decline.
In the meantime, the Services PMI flash estimate fell to 51.5 from 53.0 previously and 53.7 forecasted.
On August 3, market participants expect the Bank of England (BoE) to raise its benchmark interest rate from 5% to 6%. But the Bank of England's latest rate increase adds to worries about the impact of the Bank's most aggressive rate hikes in three decades on the UK economy.
There hasn't been any major UK economic data released recently. Therefore the value of the USD will likely continue to affect the pair's movement. The DXY is down by -0.11% to 101.23, giving strength to the British pound against greenback.
Traders will also pay attention to the US CB Consumer Confidence report, the Advance GDP QoQ report, and the core Personal Consumption Expenditure (PCE) Price Index MoM report, the Fed's preferred inflation gauge.
These numbers may have a major effect on the dynamics of the US Dollar and guide the GBP/USD pair.
GBP/USD - Technical analysis
The GBP/USD pair has found robust support at the level of 1.2805 and has initiated a bullish rebound from this key level. This development indicates a potential resumption of the main bullish trend, which is aligned with the existing bullish channel evident on the chart.
As a result, the upcoming sessions are expected to witness a bullish trajectory, with positive targets identified at 1.2870, followed by 1.2935 and 1.3010.
However, it is worth noting that achieving the suggested targets will require additional positive momentum in the market.
Investors should be watchful of potential price action, as a break below the levels of 1.2805 and 1.2780 could signal a shift away from the bullish channel and a short-term decline in the price.
For today's trading activities, the anticipated range for the GBP/USD pair is expected to be between the support level of 1.2775 and the resistance level of 1.2930.
Traders are advised to closely monitor market movements and price behavior to make informed trading decisions during this period.
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
The GBP/USD pair is currently experiencing downward pressure, trading below the 1.2935 level. This calls for cautious trading as a break below this level, followed by a breach of 1.2870, could signal further declines throughout the day, with a potential target of 1.2806.
However, the bullish trend scenario remains valid for today as long as the mentioned support levels hold. In this case, the price targets for GBP/USD start at 1.3010 and could extend to 1.3140 after surpassing the initial resistance.
The expected trading range for today is between the support level at 1.2870 and the resistance level at 1.3050.
The expected trend for today is bullish, provided that the support levels mentioned earlier remain intact.
GBP/USD - Trade Idea
Entry Price – Sell Limit 1.29502
Take Profit – 1.27496
Stop Loss – 1.30605
Risk to Reward – 1: 1.80
Profit & Loss Per Standard Lot = +$200/ -$110
Profit & Loss Per Micro Lot= +$20/ -$11
GBP/USD Price Analysis – July 21, 2023
Daily Price Outlook
During Friday's Asian session, the GBP/USD pair experienced a slight increase, rebounding from a one-and-a-half-week low observed in the range of 1.2840 to 1.2835 the previous day.
However, spot prices are currently hovering near 1.2880, showing a minor gain of just over 0.10% for the day, without any significant follow-through buying or strong bullish sentiment.
The US Dollar (USD) is playing a significant role in supporting the GBP/USD pair, as it retraces the strong overnight advance that brought it close to a one-week high.
Positive US macroeconomic data released on Thursday, indicating continued strength in the US labor market and supporting expectations of further policy tightening by the Federal Reserve (Fed), is preventing significant downside for the USD.
However, investors remain uncertain whether the Fed will stick to its projection of a 50 basis point interest rate hike by the end of this year or adopt a more dovish policy stance.
GBP/USD: Cable Bears Await Confirmation from 1.2850 and UK Retail Sales
During the uneventful Asian session on Friday, the GBP/USD currency pair is stabilizing at around 1.2870 after five consecutive days of decline, which led to a two-week low. As the market anticipates the release of UK Retail Sales data for June, the Cable pair is exhibiting the usual pre-data consolidation.
GBP/USD - Technical analysis
The GBP/USD pair is currently experiencing downward pressure, trading below the 1.2935 level. This calls for cautious trading as a break below this level, followed by a breach of 1.2870, could signal further declines throughout the day, with a potential target of 1.2806.
However, the bullish trend scenario remains valid for today as long as the mentioned support levels hold. In this case, the price targets for GBP/USD start at 1.3010 and could extend to 1.3140 after surpassing the initial resistance.
The expected trading range for today is between the support level at 1.2870 and the resistance level at 1.3050.
The expected trend for today is bullish, provided that the support levels mentioned earlier remain intact.
GBP/USD Price Analysis – July 14, 2023
GBP/USD's short-term outlook remains positive for now. The next major target for the ongoing rally is projected to be at 1.3095, which corresponds to the 61.8% Fibonacci retracement level of the upswing from 1.0351 to 1.2445.
However, if the price drops below the minor support level at 1.2884, the intraday bias will shift to neutral, and we may witness consolidations before another potential recovery.
The GBP/USD pair is currently consolidating near a 15-month high around the 1.3130 area during the Asian trading session on Friday. The recent substantial gains made over the past couple of weeks have propelled the spot prices to their highest level since April 2022. The fundamental environment continues to favor bullish traders.
The US Dollar (USD) has been facing selling pressure for the past seven consecutive days, reaching a new 15-month low. This is attributed to growing expectations that the Federal Reserve (Fed) is nearing the end of its tightening cycle.
Conversely, the British Pound (GBP) has been supported by increasing speculation that the Bank of England (BoE) may need to raise interest rates further to address significant inflation. These factors are expected to sustain the short-term uptrend of the GBP/USD pair and act as a tailwind.
Following the anticipated 25 basis points rate hike in July, market participants are confident that the US central bank will keep interest rates unchanged for the remainder of the year.
The recent US Consumer Price Index (CPI) report indicated a further decline in consumer prices, reinforcing this view. Additionally, the US Producer Prices Index (PPI) in June showed the weakest annual increase in almost three years.
The softening labor market in the US is also contributing to a more cautious stance from the Fed, which is likely to limit the strength of the USD.
There are no significant economic data releases expected from the UK on Friday, leaving the major markets susceptible to USD price fluctuations.
The preliminary Michigan US Consumer Sentiment Index, scheduled for release later in the early North American session, may influence trading decisions and impact the USD, providing some momentum for the GBP/USD pair on the final trading day of the week.
Overall, spot prices are anticipated to continue their upward trajectory and end the week on a positive note.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Technical analysis
The GBP/USD pair continues its upward momentum, surpassing our target at 1.3080 and opening the door for further gains.
Our next objective is set at 1.3200, although we should be aware of possible sideways movements influenced by negative stochastic signals. Nevertheless, we expect positive momentum to prevail and drive the price toward our target levels.
It's important to note that a bearish correction could occur if the price drops below the level of 1.31451. This correction would indicate a temporary reversal in the overall bullish trend.
Therefore, while maintaining a predominantly bullish outlook, it is crucial to monitor the price's behavior around the support level at 1.31451. A break below this level may signal a shift toward bearish sentiment.
For today's trading, we anticipate a range between the support level at 1.3070 and the resistance level at 1.3220. Overall, the prevailing trend for the day remains bullish, but caution is advised due to the potential for a bearish correction if the price falls below 1.31451.
GBP/USD Price Analysis – July 12, 2023
Daily Price Outlook
The GBP/USD pair received support from the overall weakness in the US Dollar (USD) and other factors. After hitting a daily low of 1.2853, the pair is currently trading at 1.2923.
However, the Pound Sterling's upside potential is being limited by concerns over a hawkish stance from the Bank of England (BoE) and its impact on the economic outlook.
As labor cost data showed more stability than expected, the Pound Sterling (GBP) faced selling pressure after a strong rally above the key resistance level of 1.2900.
The increased likelihood of a significant interest rate hike by the BoE has bolstered the GBP/USD pair. The BoE recognizes that higher disposable income will boost household spending power and drive overall demand.
Looking ahead, the pound sterling may encounter strong resistance at the 1.29 level. Despite reaching its highest point since April 2022, the GBP/USD pair's upward momentum could be dampened by negative changes in risk sentiment and a mixed employment report from the UK.
Nevertheless, the pair maintains its position above 1.2910, supported by the broad-based selling pressure on the US Dollar (USD) and the potential for additional rate increases by the BoE.
Continuing its ascent, the GBP/USD pair surpassed the crucial 1.2950 level ahead of the release of US inflation data. During the early Asian session on Wednesday, the pair remains firm, moving closer to 15-month highs.
The ongoing weakness in the US Dollar (USD) and the potential for further rate hikes by the Bank of England (BoE) contribute to the pair's upward momentum.
The GBP/USD pair continues to exhibit strong upward momentum, nearing our primary target of 1.3000. We anticipate this bullish trend to persist in the upcoming sessions, with additional targets at 1.3075 in focus.
As the price remains above 1.2848, the bullish bias is expected to maintain its dominance on both intraday and short-term timeframes, supported by the presence of a bullish channel on the chart.
However, it is important to note that a bearish correction is anticipated as the GBP/USD pair has entered the overbought zone, suggesting a potential pullback in price.
For today's trading, we expect the GBP/USD pair to trade within a range, with support at 1.2890 and resistance at 1.3050.
In summary, the overall trend for today is expected to be bullish, although there is a possibility of a bearish correction. Traders should closely monitor price levels and market conditions for potential trading opportunities.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Technical analysis
The GBP/USD pair is displaying clear upward momentum as it approaches our primary target at 1.3000. We anticipate the bullish bias to persist in the upcoming sessions, aiming for additional positive targets at 1.3075.
Hence, the bullish trend is expected to maintain its dominance on both intraday and short-term bases, characterized by the presence of a bullish channel on the chart. It is crucial for the price to stay above 1.2848 to achieve the anticipated targets.
However, it is worth noting that a bearish correction is anticipated as the GBP/USD pair has entered the overbought zone.
The projected trading range for today is situated between the support level at 1.2890 and the resistance level at 1.3050.
Overall, the trend for today is expected to be bullish with a possibility of a bearish correction.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD exhibits strong upward momentum, nearing the primary target at 1.3000.
- Holding above 1.2848 is crucial for achieving the desired targets.
- The projected trading range for today is between the support level at 1.2890 and the resistance level at 1.3050.
The GBP/USD pair is displaying clear upward momentum as it approaches our primary target at 1.3000. We anticipate the bullish bias to persist in the upcoming sessions, aiming for additional positive targets at 1.3075.
Hence, the bullish trend is expected to maintain its dominance on both intraday and short-term bases, characterized by the presence of a bullish channel on the chart. It is crucial for the price to stay above 1.2848 to achieve the anticipated targets.
However, it is worth noting that a bearish correction is anticipated as the GBP/USD pair has entered the overbought zone.
The projected trading range for today is situated between the support level at 1.2890 and the resistance level at 1.3050.
Overall, the trend for today is expected to be bullish with a possibility of a bearish correction.
GBP/USD Price Chart – Source: Tradingview
GPB/USD - Trade Idea
Entry Price – Sell Limit 1.29696
Take Profit – 1.28829
Stop Loss – 1.30095
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$867/ -$399
Profit & Loss Per Micro Lot = +$86/ -$39
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- The GBP/USD pair rallied strongly, surpassing the 1.2780 level and reaching a high of 1.2848.
- Today, we anticipate a continuation of the bearish bias, with the price likely to test the key support level of 1.2720.
- The expected trading range for today is between the support level at 1.2720 and the resistance level at 1.2880.
The GBP/USD pair experienced a strong upward rally in recent sessions, breaking the 1.2780 level and reaching a new high at 1.2848. However, the price encountered solid resistance at this level, resulting in a bearish bias supported by stochastic negativity.
As a result, we anticipate a continuation of the bearish bias today, with the price likely to test the key support level of 1.2720. It's important to note that a breach of 1.2848 would halt the expected decline and potentially lead to a resumption of the main bullish trend.
For today's trading, the expected range is between support at 1.2720 and resistance at 1.2880.
Overall, the trend for today is expected to be bearish.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Trade Idea
Entry Price – Sell Limit 1.27819
Take Profit – 1.28544
Stop Loss – 1.27266
Risk to Reward – 1: 30
Profit & Loss Per Standard Lot = +$725/ -$553
Profit & Loss Per Micro Lot = +$72/ -$55
GBP/USD Price Analysis – July 10, 2023
Daily Price Outlook
During the early trading hours in Europe on Monday, the GBP/USD pair failed to capitalize on Friday's upward movement and continues to trade above the 1.2800 level. Presently, the pair is defensively trading at 1.2801, marking a 0.35% increase for the day.
As long as the GBP/USD pair maintains its position above the 50- and 100-day Exponential Moving Averages (EMA) on the daily chart, the pair is expected to have a bullish bias. The Relative Strength Index (RSI) confirms this by showing the pair in a bullish zone, currently at 61.70.
The immediate resistance level for GBP/USD lies near 1.2850, indicating the upper limit of the Bollinger Band. Beyond that, the next barriers are the April 13 low and a resistance level at 1.2975. A break above the latter would trigger a rally towards the high of March 23 at 1.3248.
On the downside, the midline of the Bollinger Band, at 1.2730, is seen as the initial support level.
GBP/USD is trading below the year-to-date (YTD) high due to modest strength in the US Dollar, but it continues to hold above the 1.2800 level.
The start of the new week sees GBP/USD trading in a subdued manner, retracing some of the recent gains that propelled it to its highest level since April 2022 on Friday. Throughout the Asian session, price movement has been limited within a narrow trading range, currently hovering around the 1.2820-1.2815 region with a slight decline of just over 0.10% for the day.
Traders may exercise caution and refrain from taking significant risks as they await the release of the UK monthly employment figures on Tuesday.
Additionally, Wednesday's release of the latest US consumer inflation data will have a significant impact on the near-term dynamics of the USD and potentially provide the GBP/USD pair with a new direction.
In the absence of any significant market-moving economic announcements, traders on Monday will closely follow the speech by Bank of England (BoE) Governor Andrew Bailey for potential short-term opportunities.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Technical analysis
The GBP/USD pair experienced a strong upward rally in recent sessions, breaking the 1.2780 level and reaching a new high at 1.2848. However, the price encountered solid resistance at this level, resulting in a bearish bias supported by stochastic negativity.
As a result, we anticipate a continuation of the bearish bias today, with the price likely to test the key support level of 1.2720. It's important to note that a breach of 1.2848 would halt the expected decline and potentially lead to a resumption of the main bullish trend.
For today's trading, the expected range is between support at 1.2720 and resistance at 1.2880.
Overall, the trend for today is expected to be bearish.
GBP/USD Price Analysis – July 07, 2023
Daily Price Outlook
The British Pound is trading at 1.2740 decreasing by 0.02 percent on Friday. The monthly payrolls report still to come, heightened the possibility of higher Federal Reserve interest rates for a longer period, the U.S. dollar declined in early European hours on Friday but is still on track for modest gains this week.
JPMorgan thinks interest rates might reach 7% and foresees a "hard landing" in the UK.
According to JP Morgan, the dangers of an economic hard landing are also increasing, and the Bank of England may raise interest rates to 7% to control inflation.
Since borrowing costs are frequently connected with the primary interest rate set by the central bank, the study by JP Morgan economist Allan Monks comes as U.K. households see a dramatic spike in borrowing rates.
Looking ahead, a variety of variables, according to JPMorgan's Monks, might lead the central bank to raise rates more than anticipated.
As psychology changes and a persistent wage-price spiral takes hold, "high inflation might lead to a larger rise in inflation expectations. Elevated short-term expectations may potentially result in a more chronic issue, even if longer-term measures stay grounded, he noted.
To guarantee real rates, turn sufficiently positive to disrupt this dynamic, the BOE may be forced to raise rates above our prediction. These comments from JP Morgan analyst added pressure on British Pound.
The Upcoming US Non-Farm Payroll data is keeping Market steady
On US front, ADP private payrolls increased significantly in June, marking the greatest increase since February 2022, according to data released on Thursday. Last week saw a modest increase in the number of Americans submitting new unemployment benefit claims.
These data releases show a labor market that is durable and has withstood an aggressive tightening cycle that lasted a full year, indicating that the Federal Reserve can keep raising interest rates to completely control rising prices.
Now, attention will shift to the much-anticipated monthly nonfarm payrolls report, which might provide more hints about the Fed officials' plans for later this month.
This should display nonfarm payrolls. After growing by 339,000 in May and by 294,000 in April, nonfarm payrolls in the United States expanded by 225,000 jobs last month.
Traders are awaiting its release and are cautious ahead of it, causing little to no movement in the market.
GBP/USD Price Chart – Source: Tradingvie
GBP/USD - Technical analysis
Yesterday, the GBP/USD pair displayed a mix of trading patterns, initially rising strongly to reach the 1.2780 level, but quickly retracing downwards to test the 1.2675 areas.
It is worth noting that the price currently holds above the crucial support level at 1.2720, indicating an attempt to regain the main bullish trend.
However, the price is currently confined within a rising wedge pattern, which could potentially lead to a correctional bearish movement.
Given the conflicting technical factors, we maintain a neutral stance until we receive clearer signals for the next trend.
Breaking below 1.2720 would likely push the price towards the next correctional station at 1.2640, while surpassing 1.2760 would be key to achieving new gains, potentially targeting the 1.2850 areas.
For today's trading, we anticipate the price to move within a range of support at 1.2640 and resistance at 1.2820.
Overall, the expected trend for today is neutral, considering the current market conditions.
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
Yesterday, the GBP/USD pair displayed a mix of trading patterns, initially rising strongly to reach the 1.2780 level, but quickly retracing downwards to test the 1.2675 areas.
It is worth noting that the price currently holds above the crucial support level at 1.2720, indicating an attempt to regain the main bullish trend.
However, the price is currently confined within a rising wedge pattern, which could potentially lead to a correctional bearish movement.
Given the conflicting technical factors, we maintain a neutral stance until we receive clearer signals for the next trend.
Breaking below 1.2720 would likely push the price towards the next correctional station at 1.2640, while surpassing 1.2760 would be key to achieving new gains, potentially targeting the 1.2850 areas.
For today's trading, we anticipate the price to move within a range of support at 1.2640 and resistance at 1.2820.
Overall, the expected trend for today is neutral, considering the current market conditions.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Trade Idea
Entry Price – Buy Stop 1.27679
Take Profit – 1.28362
Stop Loss – 1.27044
Risk to Reward – 1: 1
Profit & Loss Per Standard Lot = +$683/ -$635
Profit & Loss Per Micro Lot = +$68/ -$63