Technical Analysis

GBP/USD Price Analysis – July 21, 2023

By LonghornFX Technical Analysis
Jul 21, 20232 min

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 Price Chart – Source: Tradingview
GBP/USD Price Chart – Source: Tradingview

 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.



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