Monthly Resistance Zone Could Yield Short Opportunities During Pullback

Forex

Central Bank

Summary:

This suggests one more upward push remains possible before the correction begins, keeping short setups favored near the local resistance zone.

SELL GBPUSD

EXP

PENDING

1.36420

Entry Price

1.34600

1.37500

1.36065 +0.00018 +0.01%

Pips

PENDING

1.34600

Exit Price

1.36420

Entry Price

1.37500

The U.S. Department of the Treasury announced an expansion of its long-term bond buyback program aimed at improving market liquidity and helping lower long-term borrowing costs, which remain near multi-year highs. As part of this strategy, the maximum operation size for higher-maturity nominal securities will increase from the current $2 billion to at least $4 billion per operation.

Meanwhile, minutes from the Federal Reserve's July meeting revealed that a significant portion of monetary policymakers view further rate hikes as likely necessary if inflation fails to show continued moderation. At that meeting, the Fed opted to leave the federal funds rate unchanged in the 3.50%-3.75% range, though several members voiced concern over the risk that delayed action could complicate the task of returning inflation to the 2% target.

In the United Kingdom, inflation accelerated during July. The headline Consumer Price Index (CPI) rose to 2.9% year-over-year—its highest reading in four months—up from 2.6% in June and matching market expectations. Meanwhile, core inflation held steady at 2.6%, ticking slightly above the consensus estimate of 2.5%. However, underlying services inflation, viewed as one of the Bank of England's (BoE) most critical metrics, slowed to 3.4% from 3.6%, limiting the upside for the British pound following the release.

Signals coming from the Bank of England remain mixed. Although the latest meeting revealed a more hawkish vote split within the Monetary Policy Committee than markets had anticipated, Governor Andrew Bailey's subsequent comments were interpreted as dovish, dimming support for Sterling and reinforcing the view that the central bank maintains a cautious stance regarding future policy moves.

On the economic activity front, the UK economy maintained a solid pace of expansion during the second quarter of 2026. Gross Domestic Product grew 0.4% quarter-over-quarter, slowing from the 0.6% pace recorded in the first quarter, though matching market projections. On an annual basis, growth picked up to 1.2%, topping both the prior 0.9% reading and expectations of 1.1%.

On a monthly basis, UK GDP expanded 0.3% in June, bouncing back from May's flat reading and exceeding consensus estimates, suggesting that economic activity closed out the second quarter with positive momentum. Monthly Resistance Zone Could Yield Short Opportunities During Pullback_1

Monthly Resistance Zone Could Yield Short Opportunities During Pullback_1

Technical Analysis

GBPUSD is approaching a major resistance zone positioned near 1.3642—levels not visited since May 11, when price rejected lower and sellers took control, driving the move down to 1.3141 on June 23. Consequently, if price rejects lower off this boundary once again, a downward correction could unfold, potentially carrying price toward the 0.50 and 0.618 Fibonacci retracement zone, where pullbacks frequently meet their targets. Furthermore, the 100 and 200-period moving averages sit near this area at 1.3432 and 1.3393, respectively, turning this cluster of technical reference points into a logical target range.

Turning to the oscillators, the RSI is approaching the 71.88 mark, which represents its recent peak. Having pulled back from this level previously, a retest could offer short-positioning opportunities. Meanwhile, the MACD shows a bullish histogram with limited depth, while the signal lines remain in positive territory but close to the neutral mark. This suggests one more upward push remains possible before the correction begins, keeping short setups favored near the local resistance zone.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3642

Target price: 1.3460

Stop loss: 1.3750

Validity: Aug 31, 2026 15:00:00

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Monthly Resistance Zone Could Yield Short Opportunities During Pullback

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