GBP/USD analysis on July 25, 2024
After a significant increase at the beginning of the month, this week, against the background of the correction of the US dollar, the quotes of the GBP/USD pair turned down. During Thursday's Asian session, the pair is trading near the 1.2888 level.
The movement of sterling is coordinated by UK macroeconomic statistics. The index of business activity in the manufacturing sector increased from 50.9 to 51.8 points, and in the services sector — from 52.1 to 52.4 points, which led to an increase in the composite indicator from 52.3 to 52.7 points. This gives investors hope for the strengthening of the British currency, at least until the publication of reports on the labor and real estate market next week. The indicators are recovering after the uncertainty caused by the parliamentary elections, which may accelerate GDP growth, but most experts believe that the active actions of the Bank of England will begin no earlier than autumn.
The dollar index is trading at 103.90. A recent report on second home sales showed a decrease from 4.11 million to 3.99 million, and the volume of sales of new homes decreased from 621.0 thousand to 617.0 thousand, which is the lowest since November. High interest rates on 30-year mortgages, despite the correction from 6.87% to 6.82%, continue to restrain purchasing activity in conditions of high inflation.
On the daily chart, the pair retreats from the resistance line of the ascending channel 1.3070–1.2750.
Technical indicators are turning downwards, but they still do not give confident sell signals. The fan of averages on the alligator indicator is intertwined and preparing for a reversal, the awesome oscillator indicator forms decline bars, but remains in the buy zone.
It is recommended to open short positions when the price decreases and fixes below the level of 1.2860. We consider 1.2750 to be the nearest target. We will set the stop loss at 1.2910.
We will open purchases with an increase and consolidation of the price above 1.2930 with a target of 1.3040. In this case, we put the stop loss at 1.2880.