Quotes of the GBPUSD currency pair remain stable in anticipation of the publication of economic data from the US and the UK. On Wednesday, business activity indicators in England will be released. Traders’ attention is also focused on the US Gross Domestic Product (GDP) reports for the second quarter, which will be released on Thursday, and Friday’s Personal Consumption Expenditures (PCE) data for June. This data could clarify the timing of the Federal Reserve’s (Fed) interest rate cut.
The Federal Open Market Committee (FOMC) will hold a two-day policy meeting on July 30-31. Markets have generally already priced in a 25 basis point rate cut by September and a second policy easing by the end of the year, according to CME FedWatch data.
At the same time, chances of an interest rate cut by the Bank of England are diminishing in August. However, the easing of monetary policy in the UK has clearer prospects amid declining inflation in the country.
The main attention of investors is still focused on the presidential election campaign in the US. The U.S. currency rose slightly at the end of trading on Monday as investors assessed a decision by U.S. President Joe Biden to end his election campaign. However, the upward trend has since been reversed, which may be related to Donald Trump’s leadership in the election campaign.
Technical characteristics of GBPUSD price formation demonstrate the pair’s exit from the uptrend on the H4 timeframe, which signals a change of trend. The Moving Average of Oscillator indicator volumes (with parameters 12, 26, 9) are below zero, indicating a potential price drop.
Short-term prospects for the GBPUSD currency pair price suggest selling, with the target at the level of 1.2780. Part of the profit should be taken near the level of 1.2860. A stop-loss could be placed at the level of 1.3000.
Since the bearish trend is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.
