The GBP/USD pair marked its fourth consecutive week of losses, closing down despite a late-week recovery. The focus now shifts to upcoming inflation updates from the UK and US, which could impact market sentiment and trading decisions.
After a tumultuous week driven by the Bank of England’s actions, GBP traders are now awaiting the latest Consumer Price Index (CPI) data from both sides of the Atlantic. The US Federal Reserve’s potential rate cuts in September are also in the spotlight, with market expectations adjusting slightly in recent days.
Forecasting the Coming Week: US CPI and Fed’s Easing
Market sentiment is heavily influenced by the possibility of a rate cut by the Federal Reserve next month. While expectations for a double cut have slightly decreased, the FedWatch Tool indicates a high probability of rate cuts in the coming months. The focus next week will be on US inflation data, including the Producer Price Index (PPI) and Consumer Price Index (CPI) releases.
UK CPI inflation is expected to rise slightly in July, while GDP growth numbers for the UK are also anticipated next week. The GBP/USD pair continues to show bearish momentum, hovering just above key support levels.
Analysis and Breakdown
For those looking to trade GBP/USD, it’s crucial to monitor upcoming inflation data and central bank actions. The potential for rate cuts by the Fed could impact the pair’s performance in the coming weeks. Additionally, economic indicators from both the UK and US will provide valuable insights into market sentiment and potential trading opportunities.
Investors should keep a close eye on key support levels and resistance levels for the GBP/USD pair, as well as any developments in central bank policies. By staying informed and analyzing market trends, traders can make more informed decisions and adapt their strategies accordingly.