Market Analysis

GBP/USD Struggles Near 1.2850 with Fed and BoE Policy in Focus

Dupoin · 01 Aug 202427.5K Views

GBPUSD

Forecast: Anticipated Upturn

Fundamental Analysis:

The GBP/USD pair is currently recovering from recent losses, trading around 1.2840 during the Asian session. A review of the daily chart indicates that the pair might be in a consolidation phase or potentially reversing within a descending channel. After climbing above 1.2850 on Tuesday, the pair lost momentum and ended the day lower. It remains stagnant just below 1.2850 as investors await the upcoming monetary policy decisions from the Federal Reserve and the Bank of England.

The US Dollar has shown resilience, bolstered by stronger-than-expected consumer confidence and job openings data, which strengthens the currency's position against other currencies.

Technical Analysis:

The GBP/USD pair continues to trade below a descending trend line established in mid-July. The Relative Strength Index (RSI) on the 4-hour chart remains below 40, signaling a bearish outlook.

On the downside, immediate support is found at 1.2830, corresponding to the 50% Fibonacci retracement of the recent uptrend. If this support level becomes resistance, further declines could occur towards 1.2800 (200-period SMA and psychological level), 1.2780 (61.8% Fibonacci retracement), and 1.2750 (static level).

Conversely, if the pair breaks above the descending trend line near 1.2840, it may encounter resistance at 1.2880 (38.2% Fibonacci retracement) before testing 1.2900 (100-period SMA).

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