GBPUSD remains cautious after bouncing off a six-week low, clinging to recent minor advances.
GBPUSD maintains modest gains around 1.2700 as market participants prepare for top-tier UK/US data on early Tuesday. However, the Cable pair recently recovered from its lowest level in 1.5 months as the US Dollar fell, but it failed to extend the recovery movements owing to a cautious atmosphere in the markets ahead of the data, as well as mixed worries. discusses the frontline risk catalysts.
However, the US Dollar Index (DXY) is retreating from its highest level in five weeks, recording the first daily loss in four around 103.05 by press time, following disappointing inflation data. Nonetheless, the New York Fed’s one-year inflation estimates for July fell three points to 3.5%, the lowest level since April 2021. The New York Fed study, on the other hand, indicated optimism about positive labor market conditions and economic change.
Downbeat US inflation predictions, as well as market positioning for US retail sales, cause the US dollar to fall.
Aside from that, statements by US Treasury Secretary Janet Yellen, who dismissed concerns about the US economy stemming from a possible slowdown in China, appear to have favored mood and the GBPUSD bulls recently. Nonetheless, US Treasury Secretary Janet Yellen cited the threats to the global economic developments from China’s slowdown, the Russia-Ukraine war and climate change-related disasters, as well as their spillover impacts.
It should be mentioned that a deluge of recent China statistics and statements from China’s Stats Bureau Official have highlighted economic concerns about the world’s second-largest economy and propelled the risk-on mindset.
According to Reuters, the Chartered Institute of Personnel and Development (CIPD) in the United Kingdom released details of their latest survey, stating that human resources executives expected to increase basic pay rates by a median of 5% – unchanged from the previous two quarters and the joint-highest readings since the survey began in 2012. Following the positive UK GDP figures, the news reinforces the hawkish leaning toward the Bank of England (BoE). published the last week.
Against this environment, the S&P 500 Futures post minor gains, as US 10-year Treasury note rates hover near their highest level since November 2022, as of the previous day.
Looking forward, a predicted unchanged UK Unemployment Rate of 4.0% for the three months to June will compete with an expected increase in Average Earnings for the three months to June.
Technical Outlook
GBPUSD is still trading within a six-week-old ascending triangle bullish chart formation, which is now trading between 1.2775 and 1.2630, despite negative MACD signs.
