GBP/USD towards 1.277 before reaching 1.31
Current Context
The GBP/USD pair settled at 1.2895 during the Asian trading hours on Thursday. The increasing possibility that the Bank of England (BoE) might start cutting interest rates in August has weakened the British Pound. In the absence of significant economic data releases from the UK, the GBP/USD pair will be influenced by the US Dollar (USD).
Support and Resistance Levels
Support Levels:
1.2875-1.2870: This range is defined by the 38.2% Fibonacci retracement of the latest uptrend.
1.2830: Level corresponding to the 50% Fibonacci retracement.
1.2800: Psychological and static level.
Resistance Levels:
1.2900: Psychological and static level.
1.2940-1.2950: Range defined by the 23.6% Fibonacci retracement.
Economic Data Influence
UK Data:
The S&P Global/CIPS Composite PMI for the UK improved to 52.7 in the flash estimate for July from 52.3 in June, indicating ongoing expansion in private sector business activity.
However, statements from Chris Williamson of S&P Global Market Intelligence highlight caution among policymakers in changing monetary policy due to inflationary pressures and additional costs from shipping delays and rising freight prices.
The risk-averse market context limits the ability of GBP/USD to regain ground despite positive PMI data.
US Data:
S&P Global will release the July PMI data for the United States. If either the Manufacturing or Services PMI unexpectedly falls below 50, the US Dollar could maintain its strength, further capping the upside potential for GBP/USD.
Market Sentiment
The risk-averse market climate is negatively impacting GBP/USD. At the time of writing, the UK's FTSE 100 Index is down nearly 0.5%, and US stock index futures are down between 0.5% and 0.9%. This risk-averse sentiment supports the strength of the US Dollar and exerts bearish pressure on GBP/USD.
The GBP/USD pair settled at 1.2895 during the Asian trading hours on Thursday. The increasing possibility that the Bank of England (BoE) might start cutting interest rates in August has weakened the British Pound. In the absence of significant economic data releases from the UK, the GBP/USD pair will be influenced by the US Dollar (USD).
Support and Resistance Levels
Support Levels:
1.2875-1.2870: This range is defined by the 38.2% Fibonacci retracement of the latest uptrend.
1.2830: Level corresponding to the 50% Fibonacci retracement.
1.2800: Psychological and static level.
Resistance Levels:
1.2900: Psychological and static level.
1.2940-1.2950: Range defined by the 23.6% Fibonacci retracement.
Economic Data Influence
UK Data:
The S&P Global/CIPS Composite PMI for the UK improved to 52.7 in the flash estimate for July from 52.3 in June, indicating ongoing expansion in private sector business activity.
However, statements from Chris Williamson of S&P Global Market Intelligence highlight caution among policymakers in changing monetary policy due to inflationary pressures and additional costs from shipping delays and rising freight prices.
The risk-averse market context limits the ability of GBP/USD to regain ground despite positive PMI data.
US Data:
S&P Global will release the July PMI data for the United States. If either the Manufacturing or Services PMI unexpectedly falls below 50, the US Dollar could maintain its strength, further capping the upside potential for GBP/USD.
Market Sentiment
The risk-averse market climate is negatively impacting GBP/USD. At the time of writing, the UK's FTSE 100 Index is down nearly 0.5%, and US stock index futures are down between 0.5% and 0.9%. This risk-averse sentiment supports the strength of the US Dollar and exerts bearish pressure on GBP/USD.
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