UK Housing Market: Deepest Decline Since 2001

According to the latest monthly report from Rightmove Group Ltd., the UK House Price Index dropped by 1.2% in June (after −0.3% previously), while annual growth slowed from 1.8% at the start of the year to just 0.1%—the weakest reading since 2001. Unless this trend reverses, the annual change could fall into negative territory by July.

Analysts highlight that property listings are at their highest in a decade, forcing sellers to cut prices to attract buyers. Sales volumes are currently 5% above 2024 levels, but the full-year forecast for 2025 has been revised down from 4% to 2%, or around 1.15 million homes, due to intensifying market competition. Hamptons real estate also lowered its UK rental growth forecast for 2025 from 4.5% to 1.0%, citing weaker rental demand as more tenants purchase homes, spurred by shifting mortgage costs. Meanwhile, the growth in new property rental rates slowed to just 0.4% monthly, a low not seen since 2020.

US Dollar Index Retreats as Fed Dovishness Priced In

The US dollar index (USDX) continues to slide, currently trading near 97.60 amid a lack of hawkish Fed signals. While the CME FedWatch Tool now gives a 56.2% probability of a minor rate cut in September, this scenario remains subject to July FOMC developments and persistent pressure from the White House, with President Trump openly calling for lower borrowing costs. However, recent data vindicate Fed officials: inflation is rising again, suggesting the central bank will likely hold rates steady through year-end.

Technical Analysis: Key Levels and Indicators

On the daily chart, GBP/USD is correcting just above the lower support channel at 1.3400, with dynamic channel boundaries between 1.3900 and 1.3400.

  • The Alligator indicator’s fast EMAs are now below the signal line, with the AO histogram building new corrective bars in the sell zone—a fresh sell signal.
  • Support levels: 1.3380, 1.3140
  • Resistance levels: 1.3560, 1.3790
GBP/USD technical analysis July 2025GBP/USD approaches key support as technicals signal downside riskGBP/USD approaches key support as technicals signal downside risk

Trading Scenarios & GBP/USD Forecast

  • Bearish Scenario: If the pair breaks below 1.3380, consider opening sell positions targeting 1.3140. Stop-loss: 1.3470. Recommended holding period: at least 7 days.
  • Bullish (Alternative) Scenario: If GBP/USD recovers above resistance at 1.3560, buy positions could target 1.3790. Stop-loss: 1.3440.
Scenario Entry Take Profit Stop Loss Key Levels
SELL STOP 1.3380 1.3140 1.3470 1.3140, 1.3380, 1.3560, 1.3790
BUY STOP 1.3560 1.3790 1.3440 1.3140, 1.3380, 1.3560, 1.3790