GBP/USD Holds Gains Below 1.3100, Eyes US Data

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GBP/USD Holds Onto Slight Gains Below 1.3100, Keeping an Eye on US Data.

Fundamental Overview

In the European morning, GBP/USD retains its slight gains below the 1.3100 level, exhibiting a cautious stance without a clear bias. The prospects of a strengthening trend in this major currency pair are underpinned by the divergent policy outlooks of the Federal Reserve (Fed) and the Bank of England (BoE). Prior to the release of important US data, any significant corrective decline could be perceived as a favorable buying opportunity.

Despite experiencing a decline on Friday, the GBP/USD pair managed to record a 2% increase over the course of last week. As Monday begins in Europe, the pair is trading within a narrow range around 1.3100, displaying relative stability.

The US Dollar (USD), which witnessed a substantial sell-off on Wednesday and Thursday, managed to hold its ground against other major currencies leading into the weekend. This was supported by the University of Michigan reporting a notable rise in consumer confidence in early July.

On the other hand, the US Dollar Index struggles to build upon Friday’s recovery and continues to trade below the 100.00 level. The UK’s FTSE 100 Index shows a marginal decline and US stock index futures exhibit mixed trading. In the absence of top-tier data releases, a significant drop in Wall Street’s major indexes after the opening bell might stimulate demand for the USD.

Looking ahead, the UK’s Office for National Statistics is scheduled to release the Consumer Price Index (CPI) data for June on Wednesday. Market participants may prefer to remain on the sidelines and wait for this crucial data, which is expected to show a decline from 8.7% to 8.2% annually, before determining whether GBP/USD has further upside potential.

GBP/USD Technical Analysis Daily Chart

Technical Overview


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