After breaking through a six-month uptrend in mid-July, the GBPUSD currency pair has continued to decline. Yesterday, for the first time since May, quotes fell below the 1.32 level, near which they are now attempting to consolidate. The pound’s weekly drop against the dollar has pushed many technical indicators into oversold territory, suggesting an increasing probability of a rebound. However, the overall trend on the GBPUSD chart has already reversed, and the next downside target could be the 1.313 level.
This milestone is important for several reasons. First, the 1,313 level matches the low of May and the local high of early April. The 200-day moving average line is now located here as well. A breakdown of this line may further accelerate the downward movement. Thus, many market participants will try to defend the targeted level. However, even if the first test of 1.313 is unsuccessful, the forming downward channel will surely give the GBP sellers and the USD buyers other chances to get what they want.
Analysts surveyed by Reuters do not expect GBPUSD to climb above the 1.33 level because the pound has exhausted its upward momentum following a strong first half of 2025. Moreover, with a 90% chance, the Bank of England (BoE) will cut its key rate at its next meeting on August 7 due to deteriorating economic statistics. In contrast, the Federal Reserve (Fed) has only a 40% probability of taking the same step in September.
However, this scenario may change as soon as today after the release of US labor data for July. According to Bloomberg’s consensus forecast, the number of jobs created is expected to fall from 147,000 to 106,000, while the unemployment rate is projected to rise from 4.1% to 4.2%. Yet even these figures are unlikely to push the Fed toward immediate rate cuts, as both indices remain within historically normal ranges.
A technical rebound of GBPUSD may be a great opportunity to open short positions ahead of the pair’s next fall to 1.313.
Consider the following trading strategy:
Sell GBPUSD in the 1.32–1.33 range. Take profit: 1.313. Stop loss: 1.337.
This content is for informational purposes only and is not intended to be investing advice.
