- The US dollar seems to be the best bet for investors.
- UK continues the search for the next PM.
- Bears might break below 1.17825 in the charts.
Today’s GBP/USD price analysis is bearish as investors continue to dampen currencies considered to be risky in these uncertain times. Several factors contribute to the pound’s downtrend, including a bleak economic outlook for the UK, political uncertainty, and the US dollar’s strength. However, analysts believe the current weakness in the pound is majorly driven by dollar strength.
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The US dollar has never been more attractive. Inflation in many developed economies continues to rise, with the latest US inflation report surprising investors. The Federal Reserve is expected to fight back with a 100bps rate hike, the second of its size after the Bank of Canada. A recession is looming over the global economy, and the safest currency for investors seems to be the US dollar.
At the same time, the race to succeed Boris Johnson continues with the candidate list down to five. Uncertainties remain over who will become the next prime minister and what policies they adopt.
GBP/USD key events today
GBP/USD investors will pay attention to retail sales data from the US, including the core retail sales for June, excluding automobiles. The value is expected to go up by one percentage point and is a good indicator of consumer spending in the US.
There will also be a commitment of traders’ report for the pound, showing the change in net speculative positions from the previous -56.2k. A value lower than this will show increased bearish sentiment.
GBP/USD technical price analysis: Support at 1.17825
Looking at the chart, we see the price bouncing off 1.17825. This level has provided support, which might push the price back to the 30-SMA. Short-term bulls have come in to test the waters and see if there is any weakness in the downtrend.
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If the downtrend is still strong, the price will not be able to go beyond 1.18937, the July 6 support-turned-resistance. This level coincides with the 30-SMA creating a strong resistance level. The downtrend will continue when the price breaks below 1.17825. An uptrend will come if the price breaks above the 30-SMA and the RSI starts favoring bullish momentum above 50.
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Saqib Iqbal
