GBP/USD Rebounds Ahead of July Low with UK Employment, CPI on Tap

British Pound Outlook: GBP/USD

GBP/USD appears to be bouncing back ahead of the July low (1.2616) as it extends the rebound from the monthly low (1.2665).

GBP/USD Rebounds Ahead of July Low with UK Employment, CPI on Tap

GBP/USD may attempt to retrace the decline following the Bank of England (BoE) rate-cut as it initiates a series of higher highs and lows, but data prints coming out of the UK may sway the exchange as the Monetary Policy Committee (MPC) starts to alter the path for monetary policy.

Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here

UK Economic Calendar

FOREX.com Economic Calendar

The update to the UK Employment report is anticipated to show the jobless rate widening to 4.5% in June from 4.4% the month prior, while claims for unemployment benefits are projected to increase 14.5K in July.

In addition, the UK Consumer Price Index (CPI) is anticipated to reflect a mixed picture for inflation as the headline reading is expected to increase to 2.3% from 2.0% per annum in June, while the core rate is seen narrowing to 3.4% from 3.5% during the same period.

Signs of a weakening labor market along with evidence of easing price growth may drag on the British Pound as it puts pressure on the BoE to further unwind its restrictive policy, but a batch of positive data prints may fuel the recent rebound in GBP/USD as it raises the central bank’s scope to further combat inflation.

With that said, GBP/USD may continue to retrace the decline from earlier this month as it initiates a series of higher highs and lows, but the recent rebound in the exchange rate may end up short-lived if it fails to hold above the July low (1.2616).

GBP/USD Price Chart –Daily

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

GBP/USD initiates a series of higher highs and lows following the failed attempt to test the July low (1.2616), with a move back above the 1.2760 (61.8% Fibonacci retracement) to 1.2830 (23.6% Fibonacci retracement) zone raising the scope for a push towards the monthly high (1.2863).
A break/close above the .2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) region to bring 1.3010 (61.8% Fibonacci extension) back on the radar, but lack of momentum to hold above 1.2710 (23.6% Fibonacci extension) may lead to another run at 1.2630 (38.2% Fibonacci retracement).
Failure to hold above the July low (1.2616) opens up 1.2470 (50% Fibonacci retracement), with the next area of interest coming in around the May low (1.2446).

Additional Market Outlooks

Canadian Dollar Forecast: USD/CAD Flirts with 50-Day SMA

US Dollar Forecast: USD/JPY Continues to Defend January Low

Gold Price to Eye Monthly High on Failure to Close Below 50-Day SMA

US Dollar Forecast: EUR/USD Stalls Ahead of January High

--- Written by David Song, Strategist

Follow on Twitter at @DavidJSong

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.