Pound Dollar Forecast: Neutral, but the downgrade limited by 1.3000

The GBP/USD managed to stay above the 1.3000 level, trading flat daily around 1.3030, as the market went into waiting ahead of Thursday's top-level events including the ECB's monetary policy decisions and The BOJ, and UK retail sales in June. The United States will publish some housing data before the opening of Wall Street, but given the market's negative sentiment toward the US currency, it seems unlikely that good numbers can do much for a short-lived move.

 

The pound is the second weakest currency in all areas, as the easing of inflation and Carney's comments on Tuesday cast doubt on a higher rate in the UK in the nearer term. However, as I mentioned in the previous updates, the chances of a more pronounced fall remain limited, especially if the price remains above the 1.3000 threshold.

 

Technically, the 4-hour chart shows that the price is below a still bullish SMA of 20, while the technical indicators are losing their strength within the bearish territory, lacking clear directional force. On the upside, the pair has been rejected intraday in the approaches to the region 1.3060, where the mentioned SMA of 20 is found, being the level to overcome to favor additional gains towards the price zone 1.3100 / 30.

 

A downward acceleration through 1.3000 should lead to a fall to 1.2960 first, and 1.2920 later if the former.

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