British Pound Forecast: GBP/USD Defends Rebound from Weekly Low
GBP/USD holds above the 50-Day SMA (1.3467) as it defends the rebound from the weekly low (1.3563).
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British Pound Outlook: GBP/USD
GBP/USD holds above the 50-Day SMA (1.3467) as it defends the rebound from the weekly low (1.3563), and the recent selloff in the exchange rate may turn out to be temporary should it continue to track the positive slope in the moving average.
British Pound Forecast: GBP/USD Defends Rebound from Weekly Low
However, the price action from earlier this week warns of potential headwinds for the British Pound amid doubts surrounding the outlook for UK fiscal policy, and the threat of a slowing economy may put pressure on the Bank of England (BoE) to further unwind its restrictive policy after voting 6-3 to keep the Bank Rate at 4.25% in June.
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With that said, speculation for an imminent BoE rate-cut may drag on GBP/USD ahead of the next meeting on August 7, but the exchange rate may retrace the decline from the weekly high (1.3789) as long as it holds above the 50-Day SMA (1.3467).
GBP/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView
- The failed attempt to test the October 2021 high (1.3835) may lead to a further pullback in GBP/USD as it struggles to trade back above 1.3650 (38.2% Fibonacci extension).
- Failure to defend the weekly low (1.3563) may push GBP/USD toward the 1.3410 (78.6% Fibonacci retracement) to 1.3460 (23.6% Fibonacci extension) zone, with the next area of interest coming in around the June low (1.3371).
- At the same time, GBP/USD may stage further attempts to test the October 2021 high (1.3835) should it defend the rebound from the weekly low (1.3563), with a break/close above the 1.3800 (161.8% Fibonacci extension) to 1.3810 (50% Fibonacci extension) region bringing the October 2021 high (1.3835) on the radar.
Additional Market Outlooks
US Dollar Forecast: USD/JPY Bounces Back Ahead of June Low
USD/CHF Rebound Struggles to Pull RSI Out of Oversold Zone
EUR/USD Pulls Back While RSI Holds in Overbought Zone
Australian Dollar Forecast: AUD/USD Eyes November High
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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