After a significant increase last week, on Tuesday, GBP/USD begins to decline against the background of the strengthening of the US dollar and is trading near the level of 1.2927.
Preliminary data on UK business activity indices will be published tomorrow at 10:30 (GMT+2). Analysts predict that in July the index in the manufacturing sector will grow from 50.9 to 51.1 points, and in the services sector — from 52.1 to 52.5 points, which will lead to an increase in the composite index to 52.3 points. After the June decline, such positive dynamics may support the pound exchange rate.
The US dollar index is trading at 104.00. The impact of investors' reaction to President Joe Biden's decision to withdraw from the presidential race is weakening, giving way to macroeconomic statistics, which will become the basis for monetary policy decisions at the upcoming meeting of the US Federal Reserve on July 31. Today at 16:00 (GMT+2), investors will focus on sales data on the secondary housing market, a key indicator for the real estate sector. It is predicted that the figure will decrease from 4.11 million to 3.99 million after the previous decrease of 0.7%. If the forecasts are confirmed, this may lead to the Fed's final refusal to ease monetary policy at the next meeting, and interest rates will remain high at least until mid-September.
On the daily chart, GBP/USD is adjusted, moving away from the resistance line of the ascending channel 1.3070–1.2770.
Technical indicators began to turn downwards: the alligator indicator moves closer to the signal line, and the awesome oscillator indicator forms decline bars, but remains in the buy zone.
Short positions can be opened after the price decreases and fixes below the 1.2900 level with a target of 1.2780. We set the stop loss at 1.2950.
Purchases can be opened after the price rises and fixes above the 1.2960 level with a target of 1.3070. We will set the stop loss of the transaction at 1.2900.