British Pound Forecast: GBP/USD Susceptible to Test of July Low

Multiple pound notes £5, £20 and £50 Pound Sterling
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By :  ,  Strategist

British Pound Outlook: GBP/USD

GBP/USD remains under pressure following the Bank of England (BoE) rate cut and the exchange rate may continue to retrace the advance from the July low (1.2616) as it struggles to trade back above the 50-Day SMA (1.2787).

British Pound Forecast: GBP/USD Susceptible to Test of July Low

The moving average no longer reflects a positive slope as GBP/USD extends the decline from earlier this week to register a fresh monthly low (1.2673), with the Relative Strength Index (RSI) also indicating a potential change in the near-term trend as it falls to its lowest level since April.

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GBP/USD Price Chart –Daily

GBPUSD Daily Chart 08062024

Chart Prepared by David Song, Strategist; GBP/USD on TradingView

  • GBP/USD initiates a series of lower highs and lows as it struggles to hold above the 50-Day SMA (1.2787), with a breach below 1.2630 (38.2% Fibonacci retracement) raising the scope for a test of the July low (1.2616).
  • Failure to defend the June low (1.2613) may push GBP/USD towards 1.2470 (50% Fibonacci retracement) but GBP/USD may track the flattening slope in the moving average if it struggles to test the July low (1.2616).
  • Need a break/close back above the 1.2760 (61.8% Fibonacci retracement) to 1.2830 (23.6% Fibonacci retracement) zone to bring the monthly high (1.2863) on the radar, with the next area of interest coming in around 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension).

Additional Market Outlooks

AUD/USD Forecast: RSI Falls Back into Oversold Zone

US Dollar Forecast: USD/JPY Selloff Pushes RSI into Oversold Zone

US Dollar Forecast: EUR/USD Opening Range for August in Focus

--- Written by David Song, Strategist

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