The UK economy expanded 0.4% m/m in June after –0.1% in May. For Q2, GDP rose 0.3% q/q (consensus 0.1%), while the annual rate printed 1.2% after 1.3% (vs. 1.0% expected). Manufacturing led the improvement: output rebounded 0.7% m/m in June after –1.3%, and ticked up 0.2% y/y. Together, the figures gave the BoE sufficient cover to cut Bank Rate to 4.00%; if the labour market stays resilient, another policy easing before year-end remains on the table.
On the U.S. side, the dollar index sits near 97.92 as markets grow more confident about lower borrowing costs from the Fed. July jobs data had rattled investors—unemployment rose to 4.2% from 4.1%, with +73k payrolls vs. +110k expected—but weekly initial claims eased to 224k from 227k, and continuing claims slipped to 1.953m from 1.968m. Producer prices surprised hotter: PPI +0.9% m/m (after 0.0%) and +3.3% y/y (vs. 2.5% expected).
Support and resistance
On the daily chart, price is correcting just below the lower boundary of the ascending channel 1.3800–1.3400, which it broke out of in late July.
Technicals have flipped back to a buy: the Alligator’s fast EMAs have crossed above the signal line, and the AO histogram has turned positive, printing fresh recovery bars.
- Support: 1.3460, 1.3200
- Resistance: 1.3630, 1.3790
Trading scenarios
- Longs: On continued corrective strength, a sustained break above 1.3630 opens 1.3790. Stop-loss: 1.3530. Horizon: 7+ days.
- Shorts: On a reversal, a firm break below 1.3460 targets 1.3200. Stop-loss: 1.3550.
Scenario
- Timeframe: Weekly
- Recommendation: BUY STOP
- Entry: 1.3630
- Take Profit: 1.3790
- Stop Loss: 1.3530
- Key levels: 1.3200, 1.3460, 1.3630, 1.3790
Alternative scenario
- Recommendation: SELL STOP
- Entry: 1.3460
- Take Profit: 1.3200
- Stop Loss: 1.3550
- Key levels: 1.3200, 1.3460, 1.3630, 1.3790