GBPUSD:
At the start of the new trading week, the GBP/USD exchange rate saw a slight decline, falling below 1.3200 on Monday. This marks the end of a seven-day winning streak that saw the pair rise more than 3% from 1.2800 to a 29-month high of 1.3230.
UK markets were closed on Monday due to a bank holiday, which had the effect of reducing the volume of sterling flows and providing a boost to the US dollar. Following a period of heightened risk appetite, markets are currently adopting a more cautious stance in light of the Federal Reserve’s indication that a rate cut is likely to occur in September, barring any significant shifts in economic data.
The economic calendar for the upcoming trading week is expected to be relatively inactive. On Thursday, the anticipated figure for US gross domestic product (GDP) for the second quarter is expected to remain unchanged at an annualised rate of 2.8%. The focus on Friday will be on the July core Personal Consumption Expenditure (PCE) price index, which is expected to remain unchanged at 0.2% month-on-month. The year-on-year PCE inflation rate is forecast to increase from 2.6% to 2.7%. Nevertheless, investors anticipate that inflation is approaching the Federal Reserve’s 2% target, which may result in a rate cut in September.
US durable goods orders saw an unexpected increase of 9.9% in July compared to the previous month, exceeding the projected 4.0% and reversing a revised contraction of -6.9% in June. However, concerns persist as, when excluding transport costs, durable goods orders declined by -0.2% month-on-month, worse than the anticipated 0.0% and 0.1% in June, which were revised down from 0.5%.
Trading recommendation: Trading predominantly Buy orders from the current price level.
Origin: FreshForex
