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.