Current trend

The GBP/USD pair shows moderate growth, consolidating near 1.2665 in anticipation of new drivers in the market. The US currency failed to finish last week's trading with strong upward dynamics, and at the end of the week the pound managed to regain some of the lost ground as investors again focused on the possible launch of a cycle of lower borrowing costs by the US Federal Reserve. In particular, this was facilitated by Friday’s data on the Personal Consumption Expenditures - Price Index: in May, the Core CPE adjusted from 2.8% to 2.6% in annual terms and from 0.3% to 0.1% in monthly terms , and the CPE went from 2.7% to 2.6% and from 0.3% to 0.0%, respectively. A further slowdown in inflation has increased the likelihood that the US regulator will begin easing monetary policy in September. In total, by the end of 2024, no more than two interest rate adjustments of 25 basis points are expected. Around the same time, a transition to "dovish" rhetoric is predicted for the Bank of England, which is now expressing concern about persistent inflation in the country.

On Friday, June 28, investors paid attention to statistics from the UK, which allows the monetary authorities to maintain a wait-and-see attitude. According to the third and final estimate of Gross Domestic Product (GDP), in the first quarter the national economy added 0.7% in quarterly terms and 0.3% in annual terms, with forecasts of 0.6% and 0.2%, respectively, which was the highest result among all G7 countries. Real household income adjusted by 0.7% and Total Business Investment — by 0.5%, against expectations of 0.9%.

Today at 10:30 (GMT 2) statistics on Consumer Credit will be presented: Net Lending to Individuals is expected to rise in May from 3.1 billion pounds to 3.3 billion pounds, and Mortgage Approvals is likely to slow down from 61.14 thousand to 61.0 thousand.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD indicator reverses to growth while forming a new buy signal (the histogram is about to consolidate above the signal line). The indicator is about to test the zero level for a breakout. Stochastic demonstrates similar dynamics, retreating from the level of "20" and signals in favor of the development of the uptrend in the near future.

Resistance levels: 1.2700, 1.2739, 1.2771, 1.2800.

Support levels: 1.2650, 1.2600, 1.2568, 1.2539.

Trading tips

Long positions can be opened after a breakout of 1.2700 with the target of 1.2800. Stop-loss — 1.2650. Implementation time: 2-3 days.

The return of a "bearish" trend with the breakdown of 1.2600 may become a signal for new short positions with the target at 1.2500. Stop-loss — 1.2650.