**Pound Sterling Price News and Forecast: GBP/USD Draws Support from a Modest USD Pullback**
*Adapted from the original article by FXStreet*
The British Pound (GBP) continues to navigate significant macroeconomic influences as the second week of July 2024 unfolds. The GBP/USD currency pair has recently attracted support from a moderate US Dollar (USD) pullback in the foreign exchange (Forex) market, offering opportunities for both traders and long-term investors. This article provides an in-depth analysis of recent developments, technical levels, and possible future scenarios, giving traders a clear view of potential price movements for GBP/USD.
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## Market Overview
The GBP/USD recently experienced a lift as the US Dollar retreated from its recent highs. Despite underlying global and domestic uncertainties, the Pound Sterling benefited from improved risk sentiment and evolving expectations around US Federal Reserve monetary policy.
– The US Dollar’s modest pullback follows softer-than-expected economic data, fueling speculation that the Federal Reserve may delay further rate hikes or even start easing sooner than anticipated
– The Pound has shown some resilience, supported by robust UK economic data and political developments following the recent UK general election results
– Market participants are now weighing incoming economic indicators from both the UK and US, especially inflation and labor market data, to reassess their currency exposure
## Fundamental Drivers of GBP/USD Movement
### US Dollar Pullback
The US Dollar Index (DXY) had reached fresh multi-week highs on risk aversion and a flight to safety but has since eased due to:
– Disappointing US economic data, particularly in employment and consumer confidence
– Signals from Federal Reserve officials that the hiking cycle could be at a pause, shifting sentiment toward potential rate cuts
– Reduced geopolitical tensions that calmed global markets, diminishing the appeal of safe-haven assets like the USD
### UK Economic and Political Backdrop
Recent events in the UK have lent support to the British Pound, countering some negative headwinds:
– The UK general election results delivered a stable government, which is generally positive for currency markets
– Higher-than-expected growth figures for the UK’s gross domestic product (GDP) and decreased recession fears
– Encouraging wage growth and steady labor market performance
– Headline inflation in the UK remains stubborn, but underlying pressures are showing signs of easing
## Short-Term Technical Analysis for GBP/USD
The GBP/USD pair has found near-term support on dampened USD demand. The immediate technical picture is shaped by the following:
– Intraday support is seen around 1.2890, a threshold that held firm through recent market volatility
– Resistance emerges at the psychological level of 1.3000, a key round number closely watched by traders for potential breakout or rejection
– The 50-period simple moving average (SMA) on the four-hour chart supports the pair, with price consistently closing above this level in recent sessions
– Relative Strength Index (RSI) remains neutral to slightly bullish, indicating room for further upward momentum if buyers capitalize
### Key Technical Levels to Watch
– **Immediate Support:** 1.2890
– **Deeper Support:** 1.2840, followed by 1.2750 in case of a sharper decline
– **Immediate Resistance:** 1.2950
– **Major Resistance:** 1.3000, with a further upside cap at 1.3050
Technical signals suggest GBP/USD is poised for range-bound trade in the near term, with an upside bias if the pair can sustain momentum above these supports.
## Macro Events and Economic Releases in Focus
The upcoming week is critical for both currencies, with several high-impact economic data releases and central bank communications:
### United Kingdom
– **UK Labor Market Data:** Unemployment rate, average earnings, and claimant count are scheduled for release. Strong results could provide more fuel for GBP appreciation.
– **Consumer Price Index (CPI):** Inflation figures will guide Bank of England
Read more on GBP/USD trading.