GBPUSD analysis week 31
Updated
Fundamental Analysis
GBP/USD plunged on Friday, as the pound was weighed down by broad market expectations of a rate cut by the Bank of England (BoE) next week. This sent GBPUSD further lower to above 1.286.
The UK’s benchmark interest rate is expected to be cut by 25 basis points to 5.0% from the current 5.25%. The Federal Reserve (Fed) will next deliver its rate call in July, and investors are generally expecting the US central bank to leave rates unchanged at one more meeting before starting its rate-cutting cycle in September. In addition, short-term PCE inflation accelerated month-on-month in June, rising to 0.2% versus forecasts of 0.1%.
Technical Analysis
GBPUSD remains in an uptrend, The decline last week is the perfect catalyst for the uptrend to continue in the coming period. The momentum shows that buyers are still in control, as depicted by the Relative Strength Index (RSI) which is still holding above 50.
GBPUSD is supported at the 34 EMA and has responded at 1.285. The next support zone is around the EMA89 with the gap filling at 1.278. These are two important price zones that GBPUSD needs to hold to maintain the uptrend in the price channel. The bullish momentum will be reduced and could be ready for a reversal if sellers push the price to the 1.262 support zone.
On the other side of the bullish trend, GBPUSD could push back to the old high of two weeks ago around 1.305 and at the highest it could touch the upper border of the rising channel around the resistance level of 1.315.
Resistance: 1.305-1.314
Support: 1.285-1.278
Trading Signals
SELL GBPUSD zone 1.305-1.307 Stoploss 1.308
SELL GBPUSD zone 1.314-1.316 Stoploss 1.317
BUY GBPUSD zone 1.278-1.276 Stoploss 1.275
GBP/USD plunged on Friday, as the pound was weighed down by broad market expectations of a rate cut by the Bank of England (BoE) next week. This sent GBPUSD further lower to above 1.286.
The UK’s benchmark interest rate is expected to be cut by 25 basis points to 5.0% from the current 5.25%. The Federal Reserve (Fed) will next deliver its rate call in July, and investors are generally expecting the US central bank to leave rates unchanged at one more meeting before starting its rate-cutting cycle in September. In addition, short-term PCE inflation accelerated month-on-month in June, rising to 0.2% versus forecasts of 0.1%.
Technical Analysis
GBPUSD remains in an uptrend, The decline last week is the perfect catalyst for the uptrend to continue in the coming period. The momentum shows that buyers are still in control, as depicted by the Relative Strength Index (RSI) which is still holding above 50.
GBPUSD is supported at the 34 EMA and has responded at 1.285. The next support zone is around the EMA89 with the gap filling at 1.278. These are two important price zones that GBPUSD needs to hold to maintain the uptrend in the price channel. The bullish momentum will be reduced and could be ready for a reversal if sellers push the price to the 1.262 support zone.
On the other side of the bullish trend, GBPUSD could push back to the old high of two weeks ago around 1.305 and at the highest it could touch the upper border of the rising channel around the resistance level of 1.315.
Resistance: 1.305-1.314
Support: 1.285-1.278
Trading Signals
SELL GBPUSD zone 1.305-1.307 Stoploss 1.308
SELL GBPUSD zone 1.314-1.316 Stoploss 1.317
BUY GBPUSD zone 1.278-1.276 Stoploss 1.275
Trade active
Note
GBP/USD holds range below 1.2900 amid a quiet start to Big weekGBP/USD is moving back and forth in a familiar range below 1.2900 in European trading on Monday. A softer US Dollar and an upbeat market mood underpin the pair. But traders stay cautious ahead of the key Fed and BoE policy decisions due later in the week.
Trade active
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