GBP/USD Corrects Near 1.3354 as UK Housing Data Supports the Pound

The pound is supported by macroeconomic data from the United Kingdom: in June, house prices, according to Halifax Bank Plc., returned to positive dynamics for the first time in four months, rising by 0.2% month-on-month and 0.6% year-on-year. The average property price now stands at 299.330 thousand pounds. According to experts at Lloyds Banking Group Plc., recent trends in the sector reflect economic uncertainty, including the possibility of higher borrowing costs. Although housing affordability remains limited for many groups of the population, the recent decline in mortgage rates is improving investor optimism. For first-time buyers, growth accelerated from 0.3% to 0.8% month-on-month in June, while the average price of housing for this category of buyers stands at 240.433 thousand pounds, indicating continued demand. In the long term, experts expect moderate development in the sector, while monetary-policy easing should improve consumption.

The US dollar continued to correct after reports of an escalation in the US-Iran conflict in the Middle East, reaching 100.80 in the USDX index. On Tuesday, three attacks on tankers in the Strait of Hormuz were recorded, after which the United States revoked Tehran’s licence allowing it to sell oil and also began launching new strikes on the territory of the Islamic Republic. Against this backdrop, inflation risks increased, while bond yields returned to annual highs. Today at 20:00 (GMT+2), the minutes of the US Federal Reserve’s June meeting will be published, and investors hope to receive some hints about the regulator’s further monetary-policy actions. Labour-market statistics have significantly affected analysts’ hawkish expectations, but the renewed confrontation in the Persian Gulf region is again strengthening inflationary pressure, thereby supporting the probability of tighter credit conditions. According to the CME FedWatch Tool, the probability of a 25-basis-point interest-rate hike in July has risen today from 25.0% to 29.4%.

Support and resistance levels

On the daily chart, the trading instrument remains slightly below the resistance line of the descending channel with dynamic boundaries at 1.3400–1.3100.

Technical indicators are forming a buy signal: the fast EMAs of the Alligator indicator are below the signal line, while the Awesome Oscillator histogram is forming corrective bars in positive territory.

Resistance levels: 1.3400, 1.3560.

Support levels: 1.3300, 1.3140.

GBP/USD Trading Scenarios and Price Forecast

Long positions may be opened after the price rises and consolidates above 1.3400, with a target at 1.3560. Stop-loss: 1.3320. Expected implementation period: 7 days or more.

Short positions may be opened after the price declines and consolidates below 1.3300, with a target at 1.3140. Stop-loss: 1.3400.