Despite dovish commentary, Bloomberg notes UK households are losing nearly $14.5 billion per year due to falling deposit returns. Fixed-term savers have missed out on an estimated £5 billion in interest compared to last year.
Some economists see potential for rates to remain unchanged, given sticky inflation (June CPI YoY at 3.6%, core at 3.7%) and softening economic activity (manufacturing PMI slipped to 48.0, below forecast). Today’s services PMI (expected: 51.2) and composite PMI (expected: 51.0) will be key for sentiment.
Meanwhile, the US Dollar Index (USDX) rose to 98.60 after a mixed jobs report: unemployment ticked up to 4.2%, payrolls increased by only 77,000, and June was sharply revised down. According to CME FedWatch, odds of a Fed rate cut at the next meeting are now above 92%. San Francisco Fed President Mary Daly has hinted at three consecutive rate cuts this year.
Support & Resistance Levels
- Support: 1.3200, 1.3000
- Resistance: 1.3380, 1.3580
On the daily chart, GBP/USD sits below the neckline of a head-and-shoulders reversal pattern (trigger at 1.3380). Technicals have turned bearish, with the Alligator EMA below the signal line and the Awesome Oscillator signaling corrective pressure.
GBP/USD Trading Scenarios
- Short scenario: Sell below 1.3200, target 1.3000. Stop loss: 1.3300. (7+ day horizon)
- Long scenario: Buy above 1.3380, target 1.3580. Stop loss: 1.3300.
| Timeframe | Recommendation | Entry | Take Profit | Stop Loss | Key Levels |
|---|---|---|---|---|---|
| Weekly | SELL STOP | 1.3200 | 1.3000 | 1.3300 | 1.3000, 1.3200, 1.3380, 1.3580 |
| Weekly | BUY STOP | 1.3380 | 1.3580 | 1.3300 | 1.3000, 1.3200, 1.3380, 1.3580 |