GBPUSD:
Sterling snapped an eight-day slide and briefly reclaimed 1.34 as the dollar retreated on Fed-related political jitters and the weak U.S. PPI release. Even so, underlying fundamentals remain fragile for the pound: June U.K. CPI unexpectedly accelerated, complicating the Bank of England’s path toward an eventual easing cycle and raising doubts about real-wage support for consumption.
Later today traders face the labour-market report, where forecasts point to slower hiring and only modest wage growth. Combined with record gilt yields, the prospect of softer employment is stoking recession concerns and prompted the Financial Policy Committee to warn of an elevated risk of abrupt repricing in risk assets.
With the U.S. balance-of-trade gap narrowing and consensus looking for robust June retail sales, dollar demand could revive quickly, leaving GBPUSD vulnerable to fresh downside toward 1.3340. A sustained break under the psychological 1.3400 barrier would reinforce the bearish scenario.
Trading recommendation: SELL 1.3395, SL 1.3435, TP 1.3340
Origin: FreshForex
