The GBP/USD pair struggles to maintain its gains as market sentiment remains cautious, with investors showing a lack of risk appetite. The US Dollar is holding steady as all eyes are on the upcoming Federal Reserve interest rate decision in September. Traders are pricing in a 56.5% chance of a 50 bps rate cut.
Looking ahead, the US will release key Consumer Price Index (CPI) data, while the UK will publish crucial employment and inflation figures. These data points will influence central bank decisions and impact the Pound Sterling’s performance.
Technically, the Cable is at a critical juncture around the 1.2700 level. Positive divergence on the daily chart suggests a potential uptrend, supported by the RSI near 40.00 and the 200-day EMA at 1.2650. A break below 1.2665 could lead to further downside towards 1.2613 and 1.2570, while a move above 1.2800 may push the pair towards 1.2840 and 1.2900.
Analysis:
The Pound Sterling is facing challenges amidst weak market sentiment and uncertainty surrounding central bank decisions. Key economic data releases will play a crucial role in shaping the currency’s performance. Traders should closely monitor upcoming announcements and technical levels to make informed trading decisions.