GBP/USD: Bearish Outlook

24 ביוני

GBP/USD Analysis

1. Recent Performance
Current Trend: GBP/USD trades in positive territory above 1.2650 in the second half of Monday. Following a strong performance due to upbeat PMI data on Friday, the US Dollar has weakened amid a positive shift in risk sentiment, allowing GBP/USD to extend its rebound.
Previous Movements: GBP/USD fell below the 100-day Simple Moving Average (SMA) at 1.2640 on Friday but closed the week above this level, indicating sellers' hesitancy. The Relative Strength Index (RSI) on the 4-hour chart has recovered toward 50.

2. Technical Analysis
Resistance Levels:
Immediate resistance is at 1.2700 (200-period SMA on the 4-hour chart).
Additional resistance is found at 1.2720-1.2730 (Fibonacci 23.6% retracement of the latest uptrend, 100-period SMA) and 1.2800 (psychological level, static level).
Support Levels:
If GBP/USD falls below 1.2640 and uses it as resistance, the next bearish targets are 1.2600 (psychological level, static level) and 1.2580 (Fibonacci 50% retracement).
Market Indicators:
Following Thursday's sharp decline, GBP/USD touched its weakest level since mid-May near 1.2620 on Friday.
Despite ending the week in negative territory, GBP/USD stages a correction and trades above 1.2650 on Monday.

3. Fundamental Context
US Dollar Dynamics:
The USD gained strength heading into the weekend after the preliminary S&P Global Manufacturing and Services PMI for June showed robust expansion in the US private sector.
Early Monday, the USD stays under modest bearish pressure amid an improving risk mood, helping GBP/USD hold its ground.
Upcoming Data:
The US economic docket will feature the Chicago Fed National Activity Index and the Dallas Fed Manufacturing Business Index. These are unlikely to trigger significant market reactions, with investors likely remaining focused on risk perception.
Market Sentiment:
Mixed actions in Wall Street, with Dow Futures up 0.3% and Nasdaq Futures down 0.1%, could make it difficult for GBP/USD to continue stretching higher.

4. Pound Sterling Performance
Current Position:
The Pound Sterling gains ground against the US Dollar, trading around 1.2650 in early New York session on Monday, rebounding from last week’s sharp sell-off.
The upside move in the US Dollar Index (DXY) has paused and struggles to extend above the immediate resistance of 106.00.
Economic Indicators:
The near-term outlook for the USD has strengthened after the S&P Global PMI report showed unexpected expansion in the manufacturing and service sectors, with the Composite PMI jumping to 51.7.
Despite the improved PMI figures, inflation concerns have eased, aligning with the Fed's 2% inflation target.

5. Bank of England and Market Expectations

Interest Rate Outlook:
Market speculation for the Bank of England (BoE) to begin lowering its key borrowing rates in August has increased after a dovish monetary policy statement.
The BoE’s decision to hold interest rates at 5.25% was “finely balanced,” signaling potential rate cuts.
Annual headline inflation has returned to the desired rate of 2%, but officials remain cautious about persistent service inflation, which decelerated to 5.7% in May.

UK Economic Outlook:
The UK’s economic outlook faces uncertainty after the preliminary S&P Global/CIPS PMI report showed unexpected slowing in the service sector, though the Manufacturing PMI expanded faster than expected.
The slowdown reflects business environment uncertainty ahead of the general election, causing a hiatus in decision-making.

Conclusion
The GBP/USD pair is currently trading above 1.2650, showing signs of recovery amid a weakened US Dollar and positive risk sentiment. Technically, the pair faces immediate resistance at 1.2700 and has support at 1.2640 and below. Fundamentally, the outlook is influenced by US PMI data and BoE's interest rate expectations. The market will continue to monitor risk sentiment and upcoming economic indicators for further direction.