Current trend

The results of the meeting of the Bank of England could not change the uncertain dynamics of the GBP/USD pair, and it is correcting at 1.2728.

Regulator officials raised the base interest rate by 25 basis points to 5.25%, in favor of which six of the nine board members voted. Two more opted for a more aggressive 50 basis points increase, while one opted to keep the figure at 5.00%. Inflation in the UK remains the highest among developed countries, which contributes to further tightening of monetary policy but the indicator is declining faster than experts expected: in June, the consumer price index was 7.9% against the forecast of 8.2%, and the core indicator was 6.9 % instead of 7.1%, against which the regulator may revise the timing of the adjustment of the cost of borrowing, so as not to exert excessive pressure on the economy. Officials expect the figure to reach 5.0% by the end of the year, supported by declining fuel prices, however, cheaper food and basic goods are not expected, which poses risks and requires continued the “hawkish” rhetoric.

The US dollar maintains local positive dynamics, trading at 102.100 in the USD Index. Initial jobless claims, as expected, rose from 221.0K to 227.0K, which increased the total number of citizens receiving assistance from the state, from 1.679M to 1.700M, also in line with the forecast. However, service PMI corrected to 52.3 points, without having a significant impact on the currency, as analysts had already expected a decline to 52.4 points.

Thus, there are no reasons for a trend change in the GBP/USD pair yet.

Support and resistance

On the daily chart, the trading instrument is moving within the global ascending channel with dynamic boundaries 1.2500–1.3200, approaching the support line.

Technical indicators confirm the decline: fast EMAs on the Alligator indicator crossed the signal line downwards, and the AO histogram forms downward bars, falling in the sell zone.

Resistance levels: 1.2840, 1.3130.

Support levels: 1.2620, 1.2410.

Trading tips

Short positions may be opened after a reversal, reduction, and consolidation of the price below 1.2620 with the target at 1.2410. Stop loss – 1.2730. Implementation period: 7 days or more.

Long positions may be opened after the price rises and consolidates above 1.2840 with the target at 1.3130. Stop loss – 1.2750.