Daily Price Outlook

Despite the UK’s business confidence improving and Bank of England Chief Economist Huw delivering a hawkish commentary, the GBP/USD currency pair failed to maintain its bullish trend and dropped to the 1.2675 level on the day. The Pound Sterling (GBP) initially demonstrates a corrective move as investors seek fresh cues about the interest rate peak from the Bank of England (BoE) for further guidance. However, the gains were short-lived as the bullish US dollar. backed by the hopes of one more interest rate hike from the Fed, kept the currency pair down.

Impact of Hawkish BoE Comments on GBP/USD

It is worth noting that Pound Sterling slipped below the 1.2700 support level following hawkish comments from Bank of England Chief Economist Huw Pill. Despite the BoE's intention to raise interest rates further in September due to elevated inflation, the currency dropped. Investors anticipate the 15th consecutive rate hike of 25 basis points, pushing rates to 5.5%. However, concerns arise about the UK's weakening demand environment due to aggressive policy tightening by the central bank. Sectors like construction, manufacturing, and housing are feeling the impact. Despite this, a Lloyds Bank survey showed a 10-point rise in business confidence in August. The GBP/USD pair may experience heightened volatility as market participants gauge the effect of these developments on the pound's value against the US dollar.

Impact on GBP/USD Amid Mixed US Labor Market Data

Furthermore, the market sentiment remains mixed as US firms slowed their hiring in July, with fewer job openings and a lower-than-expected increase in new hires in August. This suggests that the US labor market is losing momentum, potentially leading the Fed to reconsider its rate hike plans. This news has increased the likelihood of the Fed maintaining interest rates at 5.25-5.50% by year-end, as Fed Chair Jerome Powell noted that inflation is becoming more responsive to labor market conditions. The US Dollar Index has found support around 103.00 as hopes for another Fed rate hike diminish.

For GBP/USD, this could mean potential upside as the USD weakens on softer rate hike expectations, but the currency pair's direction will also depend on the upcoming US Nonfarm Payrolls and ISM Manufacturing PMI data to be released on Friday.

GBP/USD - Technical analysis

The GBP/USD pair demonstrated a robust upward surge in the previous session, finding support around the 1.2625 level and successfully reaching the anticipated bullish target at 1.2725. The pair has settled at this level, and our analysis suggests that surpassing this threshold during the morning trading session could pave the way for a continuation of the upward trajectory, aiming for levels around 1.2825 in the near-term perspective.

Consequently, our outlook leans towards a further bullish sentiment in the forthcoming sessions, bolstered by the ascent above the EMA50. It's important to note that a failure to breach the 1.2725 level may halt the positive scenario, potentially triggering a bearish phase targeting the 1.2625 level initially.

The projected trading range for today is expected to extend between the support at 1.2650 and the resistance at 1.2820.

Daily Price Outlook

The GBP/USD pair demonstrated a robust upward surge in the previous session, finding support around the 1.2625 level and successfully reaching the anticipated bullish target at 1.2725. The pair has settled at this level, and our analysis suggests that surpassing this threshold during the morning trading session could pave the way for a continuation of the upward trajectory, aiming for levels around 1.2825 in the near-term perspective.

Consequently, our outlook leans towards a further bullish sentiment in the forthcoming sessions, bolstered by the ascent above the EMA50. It's important to note that a failure to breach the 1.2725 level may halt the positive scenario, potentially triggering a bearish phase targeting the 1.2625 level initially.

The projected trading range for today is expected to extend between the support at 1.2650 and the resistance at 1.2820.

GBP/USD - Trade Idea

Entry Price – Sell Below 1.27311

Take Profit – 1.26731

Stop Loss – 1.27665

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$580/ -$354

Profit & Loss Per Micro Lot = +$58/ -$35

Daily Price Outlook

The GBP/USD currency pair continued its upward trend for a second day, trading around 1.2620 on Tuesday in Asia. However, the reason for its upward rally can be attributed to the modest US Dollar downfall. This, along with hawkish remarks by Bank of England (BoE) Deputy Governor Ben Broadbent, underpins the British Pound and provides a modest lift to the GBP/USD currency pair.

China's Market Boost, Hawkish Comments, and GBP/USD Dynamics

It is worth noting that China's decision to lower stock trading charges aims to help its market and rebuild trust among investors. This has made the US Dollar weaker, following its recent strong performance. The British Pound is benefiting from hawkish comments by Bank of England's Deputy Governor Ben Broadbent, supporting the GBP/USD pair.

In the meantime, Broadbent's remarks at the Jackson Hole Symposium suggest a cautious approach to monetary policy due to ongoing price effects. Despite recession concerns, markets expect the BoE to raise rates less than initially thought, with limited further increases anticipated after September's expected hike.

Fed Chair Powell's Impact and Market Outlook

Moreover, Federal Reserve (Fed) Chair Jerome Powell solidified market expectations for one more rate hike this year. Powell mentioned on Friday that due to persistent inflation, the Fed could raise rates again while being cautious about tightening too much. This supports higher US Treasury bond yields and, alongside global economic concerns, could prevent significant USD declines and restrict additional gains for the GBP/USD pair.

Looking ahead, investors will stay attentive as they await relevant market-moving data on Monday, while UK banks remain closed for the Summer Bank Holiday. The GBP/USD pair's recent drop below the 100-day Simple Moving Average indicates a potential downward direction.

GBP/USD - Technical analysis

The GBP/USD pair has demonstrated a notable upward trajectory, now challenging the 1.2625 threshold. Its current posture above this level augments the prospects of further appreciation, laying the groundwork for an intraday bullish momentum. We anticipate a potential trajectory towards the 1.2725 region in the near future.

However, an inability to sustain above the 1.2625 mark might curb the anticipated rise, potentially reversing the trend to a decline.

Today's forecasted trading band is set between a support of 1.2560 and a resistance at 1.2725.

Daily Price Outlook

The GBP/USD pair has demonstrated a notable upward trajectory, now challenging the 1.2625 threshold. Its current posture above this level augments the prospects of further appreciation, laying the groundwork for an intraday bullish momentum. We anticipate a potential trajectory towards the 1.2725 region in the near future.

For the forthcoming trading sessions: A successful breach of the 1.2660 level could expedite the bullish momentum.

However, an inability to sustain above the 1.2625 mark might curb the anticipated rise, potentially reversing the trend to a decline.

Today's forecasted trading band is set between a support of 1.2560 and a resistance at 1.2725.

GBP/USD - Trade Idea

Entry Price – Buy Above 1.26088

Take Profit – 1.26741

Stop Loss – 1.25583

Risk to Reward – 1: 1.2

Profit & Loss Per Standard Lot = +$653/ -$505

Profit & Loss Per Micro Lot = +$65/ -$50

Daily Price Outlook

The GBP/USD currency pair has encountered robust support at the 1.2625 level, prompting a substantial upward rebound that led to a robust test of the pivotal resistance at 1.2725. It's worth noting that the stochastic indicator is displaying evident signs of waning positive momentum, while the EMA50 is exerting downward pressure on the price movement.

Considering these factors, we hold the view that the conditions are conducive for a resumption of bearish trading dynamics in the forthcoming trading sessions. The initial targets in this projection involve a retest of the 1.2625 level. It is important to acknowledge that breaching the 1.2725 resistance level would invalidate the bearish scenario, potentially initiating a reversal towards higher price levels.

The projected trading range for the current day spans from the support level of 1.2620 to the resistance level of 1.2780. The prevailing trend for today is anticipated to lean towards the bearish side.

GBP/USD - Trade Idea

Entry Price – Sell Below 1.27292

Take Profit – 1.26658

Stop Loss – 1.27701

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$634/ -$409

Profit & Loss Per Micro Lot = +$63/ -$40

Daily Price Outlook

The GBP/USD currency pair failed to stop its slide and continued to drop on Thursday, trading around 1.2710. However, this decline can be linked to disappointing UK PMI data, which showed slower economic growth in the UK. The UK's preliminary PMI data, released on Wednesday, was worse than expected. In the meantime, the S&P Global/CIPS Composite PMI for August fell to 47.9, down from the previous 50.8 and below the expected 50.3. This drop took the index below 50, indicating economic contraction for the first time since January. As a result, the GBP/USD pair faces downward pressure due to concerns about the UK economy's performance.

Impact on GBP/USD Pair: Weaker PMIs and Cautious Investors

The GBP/USD currency pair initially declined, but found some support as US PMIs also disappointed, causing the US dollar to weaken alongside declining Treasury yields. August's S&P Global Manufacturing PMI in the US dropped to 47, below expectations of 49.3, while the Services PMI fell to 51 from 52.3, missing the expected 52.2.

These weaker PMIs signal slower economic growth in both the UK and the US, reducing the probability of upcoming interest rate hikes by their respective central banks. Investors are cautious, awaiting more economic and inflation insights as they watch the US Dollar Index at 103.40 and prepare for Fed Chair Jerome Powell's speech at the Jackson Hole symposium.

Key Economic Data to Watch for GBP/USD Traders

Traders will keep a close eye on the upcoming release of US Initial Jobless Claims and the UK's GfK Consumer Confidence data for August. These reports could provide important insights into the economic situations in both countries, offering new information for GBP/USD traders to consider.

GBP/USD - Technical analysis

The GBP/USD currency pair has encountered robust support at the 1.2625 level, prompting a substantial upward rebound that led to a robust test of the pivotal resistance at 1.2725. It's worth noting that the stochastic indicator is displaying evident signs of waning positive momentum, while the EMA50 is exerting downward pressure on the price movement.

Considering these factors, we hold the view that the conditions are conducive for a resumption of bearish trading dynamics in the forthcoming trading sessions. The initial targets in this projection involve a retest of the 1.2625 level. It is important to acknowledge that breaching the 1.2725 resistance level would invalidate the bearish scenario, potentially initiating a reversal towards higher price levels.

The projected trading range for the current day spans from the support level of 1.2620 to the resistance level of 1.2780. The prevailing trend for today is anticipated to lean towards the bearish side.

Daily Price Outlook

The GBP/USD pair exhibited a downward rebound subsequent to reaching the 1.2800 barrier in the preceding sessions. This movement aimed to test the established support level just above 1.2725. It is worth noting that the price is currently consolidating above this level, complemented by distinct positive signals observed in the stochastic indicator.

Consequently, we maintain the view that there are viable opportunities for the anticipated bullish sentiment to resume in the intraday context. This projection targets the 1.2825 level as the subsequent key target. It is important to highlight that a breach of the 1.2725 level would invalidate the positive scenario, potentially prompting a resumption of downward movement.

The anticipated trading range for the day is expected to be confined between the support at 1.2680 and the resistance at 1.2830.

GBP/USD - Trade Idea

Entry Price – Buy Above 1.27399

Take Profit – 1.27831

Stop Loss – 1.27018

Risk to Reward – 1: 13

Profit & Loss Per Standard Lot = +$432/ -$381

Profit & Loss Per Micro Lot = +$43/ -$38

Daily Price Outlook

The GBP/USD currency pair continued a small upward movement from last night but is having difficulty gaining strong momentum. It's trading in a narrow range, staying below the mid-1.2700s level during the Asian session on Wednesday. However, the recent modest upward trend could be attributed to the bearish US dollar. The broad-based US dollar lost some strength as US bond yields decreased, and there's a slightly positive attitude towards riskier assets, which makes the safe-haven dollar less attractive.

Looking ahead, traders are being cautious about making big trades before the release of UK/US PMIs (Purchasing Managers' Index) and the Jackson Hole Symposium.

USD's Performance, Fed's Stance, and Market Caution Ahead of Jackson Hole Symposium

The broad-based US dollar, tracked by the USD Index (DXY) against various currencies, couldn't maintain its gains from Tuesday when it reached its highest level since July 12. This happened even though the US Treasury bond yields decreased slightly. Additionally, a positive outlook for US stock futures weakened the safe-haven appeal of the dollar and supported the GBP/USD pair (British pound against the US dollar).

The Federal Reserve is expected to stick with its plan of keeping interest rates higher for a longer period, which influences the dollar's performance. On top of that, concerns about China's worsening economic situation are also impacting the dollar. These factors combined are preventing the dollar from falling too much and are capping the gains for the GBP/USD pair.

Traders are also being cautious before the important Jackson Hole Symposium, where central banks' statements could bring significant market volatility. Because of this upcoming event, traders are holding back from making strong bets.

British Pound's Resilience and Upcoming Economic Data

Furthermore, the British Pound (GBP) is gaining added strength due to increasing expectations of more interest rate hikes by the Bank of England (BoE). Current market trends indicate a likelihood of over 80% for a 25 basis points increase during the upcoming BoE meeting in September. This growing confidence in rate hikes has been fueled by the recent news that wages in the UK experienced a notable increase in the second quarter, reaching a new record growth rate.

This development has raised concerns about potential long-term inflation, even following a sequence of 14 consecutive rate hikes that brought rates to a 15-year high in August. Besides, the positive UK GDP report and a slightly higher UK Consumer Price Index (CPI) reading further support the potential for the BoE to continue tightening its monetary policy.

Looking ahead, the release of the flash PMI numbers from the UK and the US on Wednesday will be closely observed for chances in short-term trading. These figures offer new perspectives on the overall economic well-being and whether the central banks can consider more interest rate hikes. This has a direct impact on the GBP/USD pair.

GBP/USD - Technical Analysis

The GBP/USD pair exhibited a downward rebound subsequent to reaching the 1.2800 barrier in the preceding sessions. This movement aimed to test the established support level just above 1.2725. It is worth noting that the price is currently consolidating above this level, complemented by distinct positive signals observed in the stochastic indicator.

Consequently, we maintain the view that there are viable opportunities for the anticipated bullish sentiment to resume in the intraday context. This projection targets the 1.2825 level as the subsequent key target. It is important to highlight that a breach of the 1.2725 level would invalidate the positive scenario, potentially prompting a resumption of downward movement.

The anticipated trading range for the day is expected to be confined between the support at 1.2680 and the resistance at 1.2830.

Daily Price Outlook

The GBP/USD pair has successfully breached the resistance line of the bearish channel and established itself above it, signaling an attempt to achieve intraday gains. However, it's noteworthy that the stochastic indicator has shifted from positive momentum to a negative overlap, indicating the potential for a resumption of the corrective bearish trend. This trend is directed towards the 1.2625 region as the next key target.

As a result, it is anticipated that the upcoming trading sessions may witness downward movement. To facilitate progress towards the aforementioned target, a breakthrough of the 1.2725 level is crucial. Conversely, surpassing the 1.2825 threshold would halt the negative projection and prompt a reversal towards higher levels.

The projected trading range for today is expected to be positioned between the support at 1.2660 and the resistance at 1.2825.

GBP/USD - Trade Idea

Entry Price – Sell Below 0.64343

Take Profit – 0.63331

Stop Loss – 0.65008

Risk to Reward – 1: 1.50

Profit & Loss Per Standard Lot = +$1012/ -$665

Profit & Loss Per Micro Lot = +$101/ -$66

Daily Price Outlook

The GBP/USD currency pair stopped its three-day winning trend and is currently around 1.2720 on Friday. This is happening because retail sales data from the UK, showing weaker numbers, has pushed the pair down. Furthermore, there is a caution sentiment due to increased risk aversion, strong US Treasury yields, and ongoing economic issues in China, all of which are putting pressure on GBP/USD.

These factors might make the US Dollar stronger and could affect the direction of the pair. Traders might be more careful after UK inflation numbers, which were released on Wednesday. These numbers have already boosted the pair, and there's worry they might lead the Bank of England (BoE) to consider raising interest rates in their September meeting.

UK Retail Sales Drop More Than Expected, Pressuring GBP/USD

According to the latest data from the Office for National Statistics (ONS), UK Retail Sales took a 1.2% tumble in July compared to the expected decrease of 0.5%. This decline follows a 0.6% growth in the previous month. The Core Retail Sales, which excludes car fuel sales, also saw a drop of 1.4% in July, worse than the anticipated decrease of 0.7%.

On a yearly basis, Retail Sales went down by 3.2% in July, more than the expected 2.1% decrease, while Core Retail Sales fell 3.4%, surpassing the expected 2.2% drop. These disappointing numbers have pushed GBP/USD to test daily lows around 1.2725, trading at 1.2727 with a 0.09% decline for the day.

US Dollar Pulls Back Despite Positive Data; Market Cautious About Inflation Clues

The broad-based US dollar is giving back some of its recent gains. The DXY, which tracks the dollar against major currencies, is hovering around 103.40. However, this retreat comes despite better US data, creating caution in the market as it looks for more clues about inflation. For instance, Initial Jobless Claims for the week ending on August 11 decreased to 239K from the previous 250K, slightly beating the expected 240K. Meanwhile, the Philadelphia Fed Manufacturing Survey for August showed improvement, rising to 12 from the earlier -13.5, higher than the anticipated -10.

Key Data Releases and Jackson Hole Symposium Await in the Upcoming Week

Looking forward to the next week, investors will keep an eye on important data releases in the US and the UK. In the US, Home Sales figures and early S&P Global PMI surveys for August will be in focus. Similarly, the UK will release its PMI survey and GfK Consumer Confidence data for August. These numbers will give us a clearer picture of how both economies are doing and could influence decisions about trading the GBP/USD pair.

GBP/USD - Technical analysis

The GBP/USD pair has successfully breached the resistance line of the bearish channel and established itself above it, signaling an attempt to achieve intraday gains. However, it's noteworthy that the stochastic indicator has shifted from positive momentum to a negative overlap, indicating the potential for a resumption of the corrective bearish trend. This trend is directed towards the 1.2625 region as the next key target.

As a result, it is anticipated that the upcoming trading sessions may witness downward movement. To facilitate progress towards the aforementioned target, a breakthrough of the 1.2725 level is crucial. Conversely, surpassing the 1.2825 threshold would halt the negative projection and prompt a reversal towards higher levels.

The projected trading range for today is expected to be positioned between the support at 1.2660 and the resistance at 1.2825.