Sudden Bearish Turn! GBP/USD Rebound Proves Unsustainable

Summary:

Data released Tuesday by Lloyds Bank, a British mortgage lender, showed that U.K. home prices rose slightly in June, marking the first monthly increase since February of this year.

SELL GBPUSD

EXP

TRADING

1.33580

Entry Price

1.28000

1.36000

1.33599 +0.00036 +0.03%

0.0

Pips

Flat

1.28000

Exit Price

1.33580

Entry Price

1.36000

Fundamentals

Data released Tuesday by Lloyds Bank, a British mortgage lender, showed that U.K. home prices rose slightly in June, marking the first monthly increase since February of this year. However, the bank also warned that economic uncertainty continues to cast a shadow over the market outlook. Lloyds Bank’s index of U.K. home prices rose 0.2% for the month and 0.6% year-over-year.

New York Fed President Williams said Tuesday that concerns about inflation had eased somewhat, but he did not signal an interest rate cut, noting that monetary policy remains focused on the dual goals of price stability and full employment. The Federal Reserve kept interest rates unchanged at 3.5%–3.75% last month, and new Chair Wash has insisted on a data-dependent approach without forward guidance, indicating that the Fed’s policy will maintain a high-interest-rate environment for the long term.

Technical Analysis

On the daily chart, the GBP/USD pair shows Bollinger Bands beginning to narrow, with moving averages flattening out, indicating a potential reversal at any moment. The RSI stands at 53, and market participants are largely adopting a wait-and-see approach. On the four-hour chart, Bollinger Bands are narrowing, moving averages are flattening, and the upward momentum of the MACD has weakened, suggesting a high probability of another decline. The RSI stands at 55, and market participants are largely adopting a wait-and-see approach. Strategically, look to sell on rallies.

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Trading Recommendation

Trading Direction: Sell

Entry Price: 1.336

Target Price: 1.28

Stop-Loss Price: 1.36

Support Levels: 1.32, 1.3, 1.28

Resistance Levels: 1.37, 1.38, 1.41

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Sudden Bearish Turn! GBP/USD Rebound Proves Unsustainable

Risk Disclosure