GBPUSD continues to trade within a flat range of 1.31500–1.36500, supported by steady UK economic performance and cooled market expectations of monetary tightening by the Federal Reserve (Fed). The latest sluggish US employment report and measured inflation figures have significantly reduced the odds of a September rate hike.
Let’s turn back to the UK. The fundamental picture looks rather favorable for the pound. According to data released this week, the country’s Gross Domestic Product (GDP) rose by 0.4% in the second quarter (Q2), following a 0.6% increase in Q1. In June, the reading grew by 0.3%. The services sector turned out to be particularly resilient.
The Bank of England’s (BoE) Chief Economist has recently underpinned the national currency in his speech, noting that a stronger GDP gives the regulator room for potential rate hikes amid persistent inflation risks. Borrowing costs remained unchanged (3.75%) in
July, but investors now expect a more hawkish tone from officials than previously anticipated.
Nevertheless, there are some headwinds, which the pound should not ignore. High energy prices could accelerate UK inflation and weaken consumer demand. What’s worse, fiscal uncertainty may fuel volatility. The dollar is also influenced by an unclear geopolitical landscape—but unlike the sterling, it tends to thrive under such conditions.
The ultimate recommendation is to sell GBPUSD at the current price of 1.35000, targeting 1.31500 within a month. To shield your position from adverse market movements, place a Stop Loss order at 1.36500.
This content is for informational purposes only and is not intended to be investing advice.
