GBPUSD:
The pound remains vulnerable due to the divergence in macro momentum: the latest resilient U.S. readings support the dollar, whereas the U.K. has few growth accelerators. The market takes a sober view of the kingdom’s growth trajectory and expects the Bank of England to act cautiously, balancing cooling inflation with risks to business activity. On such days even neutral U.S. reports can increase demand for the dollar against the pound.
On the agenda are U.K. releases on consumer credit, mortgage approvals, and the money supply: investors will check whether the cooling of household demand and credit activity is deepening. Weak prints in these components traditionally cap the pound’s potential. At the same time, global uncertainty around the U.S. budget this week raises the premium for “quality” assets, which indirectly supports the USD.
Overall, the combination of a strong dollar, a cautious BoE, and soft domestic indicators creates a negative news backdrop for GBPUSD. Until new positive signals emerge from the U.K. real economy, the pair’s underlying bias remains moderately downward.
Trading recommendation: SELL 1.3435, SL 1.3455, TP 1.3345
Origin: FreshForex
