Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Aug 7, 2024
Gbpusd

Daily Price Outlook

- GBP/USD trades at $1.27022, below the pivot point of $1.2736, indicating caution.

- RSI at 39 suggests near-oversold conditions, hinting at potential further declines.

- Sell at $1.27349, target $1.26621; stop-loss set at $1.27862 for risk management.

The GBP/USD pair is trading at $1.27022, reflecting a 0.20% increase in today’s session. Despite this uptick, the pair remains below the pivot point of $1.2736, indicating a cautious outlook as traders weigh recent economic data and broader market trends.

Immediate resistance is encountered at $1.2802, with further resistance at $1.2839 and $1.2889, levels that need to be breached for the pair to establish a more sustained upward trajectory.

On the downside, immediate support is located at $1.2680, followed by significant levels at $1.2635 and $1.2614.

The Relative Strength Index (RSI) is currently at 39, suggesting that the pair is nearing oversold conditions, though not yet at levels typically associated with a reversal.

The 50-day Exponential Moving Average (EMA) is positioned at $1.2801, further underlining the bearish sentiment as the current price remains below this technical indicator.

The prevailing sentiment suggests a bearish bias unless the GBP/USD can rise above the pivot point and sustain momentum past immediate resistance.

An entry point for a short position is advised at $1.27349, with a take-profit target of $1.26621 and a stop-loss set at $1.27862.

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

GBP/USD - Trade Ideas

Entry Price – Sell Limit 1.27349

Take Profit – 1.26621

Stop Loss – 1.27862

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$728/ -$513

Profit & Loss Per Mini Lot = +$72/ -$51

GBP/USD

Technical Analysis

GBP/USD Price Analysis – Aug 07, 2024

By LonghornFX Technical Analysis
Aug 7, 2024
Gbpusd

Daily Price Outlook

During the European trading session on Wednesday, the GBP/USD currency pair maintained its upward trend and remained well bid around 1.2712 level, hitting the intra-day high of 1.2718 level.

However, the reason for its upward trend can be attributed to the rising expectations of a 50-basis point rate cut by the Fed in September. This undermined the US dollar an contributed to the GBPUSD pair gains.

CME FedWatch tool indicates 67.5% odds of a 50-basis point Fed rate cut in September, up from 13.2% last week. On the other hand, the British Pound may struggle due to rising odds of a quarter-basis point rate cut by the BoE in August.

Bearish US Dollar Boosts GBP/USD Amid Rate Cut Expectations

On the US front, the broad-based US dollar failed to maintain its bullish bias and edged lower on the day as rising expectations of a more aggressive rate cut in September grew after weaker US employment data in July raised fears of a looming recession.

The CME FedWatch tool shows a 67.5% probability of a 50-basis point interest rate cut by the Federal Reserve in September, up from 13.2% a week earlier.

According to Reuters, Federal Reserve Bank of San Francisco President Mary Daly noted that risks to the Fed's mandates are becoming more balanced, and there is openness to cutting rates in upcoming meetings.

Additionally, Chicago Fed President Austan Goolsbee stated that the central bank is prepared to act if economic or financial conditions worsen.

Therefore, the bearish US dollar sentiment helped the GBP/USD pair gain traction, rising above the 1.2719 level as traders reacted to the increasing likelihood of a US interest rate cut.

Dovish BoE Stance and Geopolitical Tensions Cap Gains in GBP/USD Pair

On the other hand, the Pound Sterling (GBP) faced challenges as the Bank of England (BoE) implemented a widely anticipated 25-basis point rate cut at its August meeting. Furthermore, market expectations now include the possibility of two further quarter-point rate cuts by the BoE by December.

Meanwhile, the concerns about escalating Middle East conflicts were heightened after Iran-backed Hezbollah launched dozens of missiles at Israel in response to the assassination of Hamas leader Ismail Haniyeh by an Israeli airstrike in Tehran.

Thus, the dovish BoE stance and escalating Middle East tensions limited gains in the GBP/USD pair, capping its upside potential.

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

GBP/USD - Technical Analysis

The GBP/USD pair is trading at $1.27022, reflecting a 0.20% increase in today’s session. Despite this uptick, the pair remains below the pivot point of $1.2736, indicating a cautious outlook as traders weigh recent economic data and broader market trends.

Immediate resistance is encountered at $1.2802, with further resistance at $1.2839 and $1.2889, levels that need to be breached for the pair to establish a more sustained upward trajectory.

On the downside, immediate support is located at $1.2680, followed by significant levels at $1.2635 and $1.2614.

The Relative Strength Index (RSI) is currently at 39, suggesting that the pair is nearing oversold conditions, though not yet at levels typically associated with a reversal.

The 50-day Exponential Moving Average (EMA) is positioned at $1.2801, further underlining the bearish sentiment as the current price remains below this technical indicator.

The prevailing sentiment suggests a bearish bias unless the GBP/USD can rise above the pivot point and sustain momentum past immediate resistance.

An entry point for a short position is advised at $1.27349, with a take-profit target of $1.26621 and a stop-loss set at $1.27862.

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Technical Analysis

GBP/USD Price Analysis – Aug 05, 2024

By LonghornFX Technical Analysis
Aug 5, 2024
Gbpusd

Daily Price Outlook

During the European trading session, the GBP/USD currency pair failed to gain traction and remained under pressure around the 1.2755 level even though the US dollar is losing its traction amid dovish sentiment surrounding the Fed’s policy stance.

The reason for its downward trend can be attributed to the Bank of England (BoE) delivering a broadly expected 25-basis point rate hike at its August meeting on Thursday. This undermined the GBP currency and contributed to the GBP/USD pair losses.

Looking ahead, traders will be watching the US ISM Services Purchasing Managers Index (PMI) closely.

The PMI, which is anticipated to rise to 51.0 in July from 48.8 in June, could have a significant impact on the market. A stronger-than-expected PMI might strengthen the USD and potentially cap gains in other assets.

US Dollar Weakness and Impact of Employment Data on GBP/USD Pair

On the US front, the US dollar struggled to gain traction and edged lower on the day due to the Federal Reserve's dovish stance and weak employment data.

Traders expect a 50-basis point rate cut in September and over 100 bps cuts this year, according to the CME FedWatch tool. This expectation arises from weak US economic data suggesting a slowdown and casting doubt on a "soft landing" for the economy.

Meanwhile, the labor market is deteriorating, and the manufacturing sector is slowing down sharply.

The July Nonfarm Payrolls report showed a drop in labor demand and a rise in unemployment to its highest since November 2021, increasing the likelihood of rate cuts.

On the data front, US Nonfarm Payrolls increased by 114,000 in July, falling short of the 175,000 expected and down from 179,000 in June. The unemployment rate rose to 4.3%, the highest since November 2021, and Average Hourly Earnings grew by just 0.2%, below the 0.3% forecast.

Therefore, the weak US employment data and rising unemployment rate have increased the possibility of rate cuts, putting pressure on the US dollar and impacting the GBP/USD pair, which remains under pressure.

Impact of BoE Rate Cut and Inflation Outlook on GBP/USD Pair

On the other side, the losses in the GBP/USD pair were mainly due to the Bank of England (BoE) implementing a widely expected 25-basis point rate cut at its August meeting. BoE Governor Andrew Bailey added that the increase in the minimum wage has not caused major concerns for the bank.

He also mentioned that the overall inflation trend, including some potential risks, is now closer to the 2% target.

This rate cut and the positive inflation outlook contributed to the GBP's weakness, as lower interest rates generally make a currency less attractive to investors. As a result, the GBP/USD pair faced downward pressure despite the US dollar's struggles.

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

GBP/USD - Technical Analysis

The GBP/USD pair is currently trading at $1.27991, reflecting a slight decrease of 0.07% as market participants continue to assess the impact of recent economic data and geopolitical events.

The currency pair has been navigating a tight range, with traders closely watching key technical levels for potential breakout opportunities. The 4-hour chart shows that GBP/USD is trading just below its pivot point at $1.2802, suggesting a bearish bias in the short term.

Immediate resistance is identified at $1.2840, which could serve as a critical barrier for bullish momentum. If the pair breaks above this resistance, further upside potential may be capped at $1.2862 and $1.2890.

Conversely, immediate support is found at $1.2741, with subsequent support levels at $1.2711 and $1.2678. These support levels are essential for traders to monitor, as a breach below could signal further downside pressure.

The Relative Strength Index (RSI) is currently at 52, indicating a neutral stance that suggests neither overbought nor oversold conditions.

This neutrality implies that GBP/USD has room to move in either direction, depending on market catalysts. The 50-day Exponential Moving Average (EMA) is aligned with the pivot point at $1.2802, reinforcing its significance as a critical level for near-term price action.

Given the current technical landscape, traders might consider selling if GBP/USD remains below $1.28017, targeting a potential decline toward $1.27409. A stop-loss above $1.28438 is recommended to manage risk and protect against unexpected volatility.

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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Aug 5, 2024
Gbpusd

Daily Price Outlook

- GBP/USD faces immediate resistance at $1.2840, with support at $1.2741.

- RSI at 52 suggests balanced momentum, allowing movement in either direction.

- The 50-day EMA at $1.2802 serves as a pivotal level for near-term trends.

The GBP/USD pair is currently trading at $1.27991, reflecting a slight decrease of 0.07% as market participants continue to assess the impact of recent economic data and geopolitical events.

The currency pair has been navigating a tight range, with traders closely watching key technical levels for potential breakout opportunities. The 4-hour chart shows that GBP/USD is trading just below its pivot point at $1.2802, suggesting a bearish bias in the short term.

Immediate resistance is identified at $1.2840, which could serve as a critical barrier for bullish momentum. If the pair breaks above this resistance, further upside potential may be capped at $1.2862 and $1.2890.

Conversely, immediate support is found at $1.2741, with subsequent support levels at $1.2711 and $1.2678. These support levels are essential for traders to monitor, as a breach below could signal further downside pressure.

The Relative Strength Index (RSI) is currently at 52, indicating a neutral stance that suggests neither overbought nor oversold conditions.

This neutrality implies that GBP/USD has room to move in either direction, depending on market catalysts. The 50-day Exponential Moving Average (EMA) is aligned with the pivot point at $1.2802, reinforcing its significance as a critical level for near-term price action.

Given the current technical landscape, traders might consider selling if GBP/USD remains below $1.28017, targeting a potential decline toward $1.27409. A stop-loss above $1.28438 is recommended to manage risk and protect against unexpected volatility.

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

GBP/USD - Trade Ideas

Entry Price – Sell Below 1.28017

Take Profit – 1.27409

Stop Loss – 1.28438

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$608/ -$421

Profit & Loss Per Mini Lot = +$60/ -$42

GBP/USD

Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jul 31, 2024
Gbpusd

Daily Price Outlook

- GBP/USD trades at $1.28266, down 0.06%, showing bearish momentum on the 4-hour chart.

- Immediate resistance levels: $1.28885, $1.29327, $1.29865; support levels: $1.27819, $1.27566, $1.27351.

- RSI at 40, 50-day EMA at $1.28853, suggesting a buy limit at $1.28190, take profit at $1.28958, and stop loss at $1.27792.

GBP/USD is trading at $1.28266, down 0.06% on the day. The 4-hour chart reveals a bearish trend, with the pair trading below the pivot point at $1.28448. Immediate resistance is located at $1.28885, followed by $1.29327 and $1.29865.

On the downside, immediate support is seen at $1.27819, with further support levels at $1.27566 and $1.27351.

Technical indicators support the bearish sentiment. The Relative Strength Index (RSI) is at 40, indicating that the pair is approaching oversold conditions but still has room for further declines.

The 50-day Exponential Moving Average (EMA) is at $1.28853, reinforcing the bearish outlook as long as the price remains below this level.

The recommended trade setup is a buy limit at $1.28190, with a take profit target at $1.28958 and a stop loss at $1.27792. This setup provides a balanced risk-to-reward ratio, allowing for potential gains while managing downside risk effectively.

The overall technical perspective for GBP/USD remains bearish below the pivot point at $1.28448. A move above immediate resistance at $1.28885 could indicate a shift towards a bullish trend, targeting higher resistance levels.

However, failure to hold above the immediate support at $1.27819 might lead to further declines, targeting the next support levels at $1.27566 and $1.27351.

In conclusion, the technical outlook for GBP/USD suggests continued bearish momentum below $1.28448.

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

GBP/USD - Trade Ideas

Entry Price – Sell Below 1.28444

Take Profit – 1.27803

Stop Loss – 1.28882

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$641/ -$438

Profit & Loss Per Mini Lot = +$64/ -$43

GBP/USD

Technical Analysis

GBP/USD Price Analysis – July 31, 2024

By LonghornFX Technical Analysis
Jul 31, 2024
Gbpusd

Daily Price Outlook

During the European trading session, the GBP/USD currency pair failed to gain any strong bullish traction and remained subdued around the 1.2835 level, hitting an intra-day low of 1.2820. The subdued trend can be attributed to expectations that the BoE will reduce interest rates in its August meeting for the first time since March 2020.

This anticipation has undermined the GBP and contributed to the GBP/USD pair's losses. However, the bearish US dollar, pressured by expectations for the Fed to begin reducing interest rates, has helped limit the GBP/USD pair's losses.

GBP Weakens on BoE Rate Cut Expectations, but USD Outlook Limits Losses

On the BoE front, the British currency has fallen against most major peers as investors anticipate the BoE might cut interest rates in August for the first time since March 2020. The BoE has maintained a tight monetary policy since December 2021 to combat inflation driven by pandemic-related stimulus.

Market experts believe a 25 basis point cut is challenging, as policymakers are cautious due to high service sector inflation.

On the data front, the UK's annual service inflation reached 5.7% in June, exceeding the BoE’s forecast of 5.1% and doubling the level needed to justify rate cuts. Despite growing expectations for a rate cut, the BoE is unlikely to commit to a clear policy change due to strong wage growth momentum.

Therefore, the anticipated BoE rate cut has weakened the GBP against most major currencies, including the USD. Despite this, the GBP/USD pair's losses are limited by a bearish USD outlook.

GBP/USD Decline Despite USD Weakness and Anticipated Fed Rate Cut

Despite the weakness in the US dollar, the GBP/USD pair is falling, indicating strong selling pressure on the British currency.

The US Dollar Index (DXY), which measures the Greenback against six major currencies, has dropped 0.2% to 104.20 as investors await the Federal Reserve’s (Fed) monetary policy decision, scheduled for 18:00 GMT.

However, the Fed is expected to keep interest rates unchanged at 5.25%-5.50% for the eighth consecutive meeting since July 2023.

However, investors are closely monitoring for signals of future rate cuts. According to the CME FedWatch Tool, a 25 basis point rate cut in September is already anticipated, driven by improved inflation data and moderating labor market conditions.

Despite the weakness of the USD, the GBP/USD pair is declining due to significant selling pressure on the GBP. The anticipated Fed rate cut in September is further exacerbating the GBP’s challenges.

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

GBP/USD - Technical Analysis

GBP/USD is trading at $1.28266, down 0.06% on the day. The 4-hour chart reveals a bearish trend, with the pair trading below the pivot point at $1.28448. Immediate resistance is located at $1.28885, followed by $1.29327 and $1.29865.

On the downside, immediate support is seen at $1.27819, with further support levels at $1.27566 and $1.27351.

Technical indicators support the bearish sentiment. The Relative Strength Index (RSI) is at 40, indicating that the pair is approaching oversold conditions but still has room for further declines.

The 50-day Exponential Moving Average (EMA) is at $1.28853, reinforcing the bearish outlook as long as the price remains below this level.

The recommended trade setup is a buy limit at $1.28190, with a take profit target at $1.28958 and a stop loss at $1.27792. This setup provides a balanced risk-to-reward ratio, allowing for potential gains while managing downside risk effectively.

The overall technical perspective for GBP/USD remains bearish below the pivot point at $1.28448. A move above immediate resistance at $1.28885 could indicate a shift towards a bullish trend, targeting higher resistance levels.

However, failure to hold above the immediate support at $1.27819 might lead to further declines, targeting the next support levels at $1.27566 and $1.27351.

In conclusion, the technical outlook for GBP/USD suggests continued bearish momentum below $1.28448.

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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jul 29, 2024
Gbpusd

Daily Price Outlook

- Pivot Point: $1.2852 marks critical level; watch for moves above or below.

- RSI Level: RSI at 31 indicates potential oversold conditions; monitor for reversal.

- 50-day EMA: Resistance at $1.2920 suggests bearish trend below this level.

GBP/USD is currently trading at $1.28171, up 0.07% on a 4-hour chart. The pivot point is set at $1.2852, marking a significant level to watch. Immediate resistance levels are $1.2889, $1.2933, and $1.2987. On the downside, immediate support is at $1.2782, followed by $1.2757 and $1.2735.

The Relative Strength Index (RSI) is at 31, indicating that the pair is nearing oversold conditions. This could suggest a potential reversal or a period of consolidation before any significant movement.

The 50-day Exponential Moving Average (EMA) stands at $1.2920, which provides a higher resistance level. If GBP/USD moves above this EMA, it could signal a stronger bullish trend. Conversely, staying below this EMA suggests continued bearish pressure.

Given the current technical indicators, the outlook for GBP/USD remains cautious. The RSI indicates potential oversold conditions, which may lead to a temporary bounce or consolidation. However, traders should be prepared for further downside if key support levels are breached.

For traders, a strategic approach would be to consider selling below the pivot point of $1.2852, with a target take profit level at $1.2782. To manage risk, a stop loss should be placed at $1.2889. This setup aims to capitalize on the prevailing bearish sentiment while acknowledging the possibility of a short-term reversal due to the oversold RSI.

In conclusion, GBP/USD is under bearish pressure, with key levels dictating its next moves.

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

GBP/USD - Trade Ideas

Entry Price – Sell Below 1.28451

Take Profit – 1.27810

Stop Loss – 1.28889

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$641/ -$438

Profit & Loss Per Mini Lot = +$64/ -$43

GBP/USD

Technical Analysis

GBP/USD Price Analysis – July 29, 2024

By LonghornFX Technical Analysis
Jul 29, 2024
Gbpusd

Daily Price Outlook

Despite the bearish US dollar and expectations of a September Fed rate cut, the GBP/USD currency pair failed to stop its losing streak and remained well offered around the 1.2839 level, hitting an intra-day low of 1.2807.

The downward trend can be attributed to the expectation that the Bank of England (BoE) will cut its interest rates by 25 basis points (bps) to 5%. This expectation undermined the GBP currency and contributed to the GBP/USD pair's losses.

Additionally, renewed strength in the US dollar, supported by uncertainty ahead of the Federal Reserve’s (Fed) monetary policy announcement, was another key factor putting pressure on the GBP/USD currency pair.

Looking ahead, traders are likely to remain cautious as they await the results of the two-day Federal Open Market Committee (FOMC) meeting, which concludes on Wednesday. This meeting, along with key US macroeconomic data, including the Nonfarm Payrolls (NFP) report at the start of the month, could provide new direction for the commodity.

BoE Rate Cut Anticipation and Service Sector Inflation Likely to Weaken GBP/USD

On the BoE front, the British currency weakens as the Bank of England prepares for its monetary policy meeting on Thursday. The BoE is expected to cut interest rates by 25 basis points to 5%, marking its first rate cut in over four years.

This decision comes after central banks shifted to restrictive policies to address inflated markets during the pandemic. Despite annual headline inflation returning to the target rate of 2%, high inflation in the service sector remains a concern.

Market experts worry that this rate cut might be challenging due to persistent service sector inflation.

Additionally, UK Prime Minister Keir Starmer's absolute majority has improved the economic outlook, with anticipated growth in manufacturing and services possibly leading to higher input prices. This could reignite price pressures and impact the currency further.

Therefore, the BoE's anticipated rate cut and persistent service sector inflation could weaken GBP/USD. Despite a positive economic outlook under Starmer, higher input prices may renew price pressures on the currency.

US Dollar Strength and Fed Rate Decision Pressure GBP/USD to Two-Week Low

On the US front, the broad-based US dollar regained traction and edged higher, pushing the Pound Sterling to a two-week low near 1.2810 against the US Dollar (USD). This comes as the market awaits the Federal Reserve's (Fed) monetary policy announcement on Wednesday.

The US Dollar Index (DXY) rose to 104.50 as investors brace for the Fed to maintain interest rates unchanged at 5.25%-5.50% for the eighth consecutive time.

Market watchers will closely examine Fed Chair Jerome Powell's statement and press conference for hints on potential rate cuts, as the Fed might acknowledge progress in reducing inflation and rising labor market risks.

Additionally, upcoming US economic data, including JOLTS Job Openings, ADP Employment Change, ISM Manufacturing PMI, and July’s Nonfarm Payrolls, will be scrutinized for further insights.

Therefore, the strengthening US dollar and the Federal Reserve's expected rate hold are pressuring the GBP/USD pair, pushing it to a two-week low as market participants anticipate future rate cuts.

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

GBP/USD - Technical Analysis

GBP/USD is currently trading at $1.28171, up 0.07% on a 4-hour chart. The pivot point is set at $1.2852, marking a significant level to watch. Immediate resistance levels are $1.2889, $1.2933, and $1.2987. On the downside, immediate support is at $1.2782, followed by $1.2757 and $1.2735.

The Relative Strength Index (RSI) is at 31, indicating that the pair is nearing oversold conditions. This could suggest a potential reversal or a period of consolidation before any significant movement.

The 50-day Exponential Moving Average (EMA) stands at $1.2920, which provides a higher resistance level. If GBP/USD moves above this EMA, it could signal a stronger bullish trend. Conversely, staying below this EMA suggests continued bearish pressure.

Given the current technical indicators, the outlook for GBP/USD remains cautious. The RSI indicates potential oversold conditions, which may lead to a temporary bounce or consolidation. However, traders should be prepared for further downside if key support levels are breached.

For traders, a strategic approach would be to consider selling below the pivot point of $1.2852, with a target take profit level at $1.2782. To manage risk, a stop loss should be placed at $1.2889. This setup aims to capitalize on the prevailing bearish sentiment while acknowledging the possibility of a short-term reversal due to the oversold RSI.

In conclusion, GBP/USD is under bearish pressure, with key levels dictating its next moves.

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GBP/USD Price Analysis – July 24, 2024

By LonghornFX Technical Analysis
Jul 24, 2024
Gbpusd

Daily Price Outlook

Despite the upbeat PMI data, the GBP/USD currency pair failed to gain positive traction and remained under pressure around the 1.2904 level, hitting an intra-day low of 1.2876.

The downward rally can be attributed to high service sector inflation and concerns over the potential impact of the Bank of England's restrictive monetary policy.

Moreover, the renewed strength of the US dollar, supported by recent developments in the US presidential elections, was another key factor putting pressure on the GBP/USD pair.

In contrast, growing expectations that the Federal Reserve may begin a rate-cutting cycle in September could cap gains in the US dollar and help the GBP/USD pair limit its losses.

US Dollar Strengthens Amid Election Speculation and Economic Data

On the US front, the broad-based US dollar regained its bullish traction and edged higher near a weekly high at around 104.50.

This strength is partly due to investor interest ahead of the US presidential elections in November, with market experts predicting a win for Donald Trump despite the Democratic nomination of Vice President Kamala Harris.

Additionally, the US dollar's performance is influenced by the anticipation of significant upcoming economic data releases.

On the data front, investors are closely watching the preliminary US S&P Global PMI data for July, expected to show modest expansion in both manufacturing and services.

The main triggers for the US dollar this week will be the preliminary Q2 GDP and the Personal Consumption Expenditures Price Index (PCE) data, scheduled for Thursday and Friday. The US economy is projected to have grown by 1.9%, up from the previous 1.4%.

Investors are particularly interested in the core PCE inflation, the Federal Reserve’s preferred inflation measure, to gauge the timeline for potential interest rate cuts, which markets currently expect to begin in September.

Therefore the stronger US Dollar, buoyed by positive economic data and election developments, puts pressure on the GBP/USD pair. Despite the UK's upbeat PMI data, the pair may face downward pressure due to the contrasting economic outlooks and potential Fed rate cuts.

GBP/USD Pair Faces Pressure Amid BoE Rate Cut Speculation and High Service Sector Inflation

However, the decline in the GBP/USD pair is linked to growing speculation that the Bank of England (BoE) will begin cutting interest rates in August. Market experts believe the UK economy is struggling under the BoE's high interest rates, significantly impacting household spending.

This concern is highlighted by the faster-than-expected contraction in UK Retail Sales, a key measure of consumer spending, in June. Despite this, BoE officials are hesitant to endorse rate cuts due to persistently high service sector inflation, which grew steadily by 5.7% in June.

On the data front, the Composite PMI for July came in higher at 52.7, surpassing estimates of 52.6 and the previous release of 52.3, thanks to increased activities in both manufacturing and service sectors.

The Manufacturing PMI rose to 51.8 and the Services PMI to 52.4, both outperforming their previous readings.

Despite the upbeat PMI data, the GBP/USD pair faces pressure. The stronger US Dollar and speculation about Bank of England rate cuts amid high UK service inflation contribute to a potential downward trend for the GBP/USD pair.

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

GBP/USD - Technical Analysis

The GBP/USD pair is currently trading at $1.2884, reflecting the latest market movements. On the 4-hour chart, the key technical levels are crucial for understanding potential price action. The pivot point is set at $1.2901, serving as a central level around which the price may fluctuate.

Immediate resistance levels are identified at $1.2942, $1.2988, and $1.3033. These levels represent potential selling points where the market may face resistance if it attempts to rise.

On the downside, immediate support levels are marked at $1.2838, $1.2782, and $1.2735. These support levels are vital as they indicate potential areas where buying interest could emerge, preventing further declines.

The Relative Strength Index (RSI) is currently at 32, indicating that the market is nearing oversold conditions. This suggests that the GBP/USD pair may experience a bounce if buyers step in at lower levels.

The 50-day Exponential Moving Average (EMA) is at $1.2951, acting as a dynamic resistance level that traders should watch closely.

Given the current technical setup, the recommendation is to sell below $1.29072. The take profit level is set at $1.28381, providing a reasonable target for downside movements. A stop loss at $1.29510 is advised to manage risk, protecting against potential upward reversals.

In conclusion, the technical outlook for GBP/USD suggests a bearish sentiment below the pivot point of $1.2901.

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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jul 24, 2024
Gbpusd

Daily Price Outlook

- GBP/USD trading at $1.2884; pivot point at $1.2901.

- Immediate resistance levels: $1.2942, $1.2988, $1.3033; support levels: $1.2838, $1.2782, $1.2735.

- RSI at 32, 50-day EMA at $1.2951; sell below $1.29072 with a stop loss at $1.29510.

The GBP/USD pair is currently trading at $1.2884, reflecting the latest market movements. On the 4-hour chart, the key technical levels are crucial for understanding potential price action. The pivot point is set at $1.2901, serving as a central level around which the price may fluctuate.

Immediate resistance levels are identified at $1.2942, $1.2988, and $1.3033. These levels represent potential selling points where the market may face resistance if it attempts to rise.

On the downside, immediate support levels are marked at $1.2838, $1.2782, and $1.2735. These support levels are vital as they indicate potential areas where buying interest could emerge, preventing further declines.

The Relative Strength Index (RSI) is currently at 32, indicating that the market is nearing oversold conditions. This suggests that the GBP/USD pair may experience a bounce if buyers step in at lower levels.

The 50-day Exponential Moving Average (EMA) is at $1.2951, acting as a dynamic resistance level that traders should watch closely.

Given the current technical setup, the recommendation is to sell below $1.29072. The take profit level is set at $1.28381, providing a reasonable target for downside movements. A stop loss at $1.29510 is advised to manage risk, protecting against potential upward reversals.

In conclusion, the technical outlook for GBP/USD suggests a bearish sentiment below the pivot point of $1.2901.

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

GBP/USD - Trade Ideas

Entry Price – Sell Below 1.29072

Take Profit – 1.28381

Stop Loss – 1.29510

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$691/ -$438

Profit & Loss Per Mini Lot = +$69/ -$43

GBP/USD