Recent data on UK public sector net borrowing, which showed a June increase of £20.68 billion versus expectations of £17.40 billion, disappointed investors and reinforced the Bank of England's dovish outlook. Meanwhile, the US dollar remains under pressure ahead of the August 1 deadline for higher tariffs and the lack of a US-EU trade deal. President Donald Trump today announced an agreement with Tokyo involving 15.0% tariffs on Japanese imports, including cars. The market reaction was muted, however, as focus remains on the unresolved tension between Washington and Brussels and the prospect of new mutual trade barriers.
Fundamentally, the outlook favors further GBP/USD upside over the medium term, with market sentiment driven by both positive trade news and relative dollar weakness.
Support and Resistance Levels
The pair is testing the 1.3550 (Murray [6/8]) mark. A breakout above this, as well as the midline of the Bollinger Bands, would open the path to 1.3672 (Murray [6/8]) and 1.3794 (Murray [+2/8]). The key support for bears remains 1.3428 (Murray [4/8]); failure to hold this level would trigger a new downward move toward 1.3306 (Murray [2/8]) and 1.3184 (Murray [0/8]).
Technical indicators are mixed: Bollinger Bands are horizontal, Stochastic is trending up, and MACD is preparing to enter positive territory.
- Resistance: 1.3672, 1.3794
- Support: 1.3428, 1.3306, 1.3184
Trading Scenarios and Pound Forecast
- Long positions can be considered above 1.3575, targeting 1.3672 and 1.3794, with a stop-loss at 1.3500. Implementation period: 5–7 days.
- Short positions may be opened below 1.3428, with targets at 1.3306 and 1.3184, and a stop-loss at 1.3510.
| Scenario | Entry | Take Profit | Stop Loss | Key Levels |
|---|---|---|---|---|
| BUY STOP | 1.3575 | 1.3672, 1.3794 | 1.3500 | 1.3184, 1.3306, 1.3428, 1.3672, 1.3794 |
| SELL STOP | 1.3425 | 1.3306, 1.3184 | 1.3510 | 1.3184, 1.3306, 1.3428, 1.3672, 1.3794 |