The GBP/USD pair has started the week on a downward trend, trading at 1.2826, a decline of 0.28%. This dip occurs in anticipation of the Bank of England’s (BoE) upcoming monetary policy decision on August 1st, with market participants increasingly expecting a rate cut despite odds remaining around 59%.
Technical Outlook:
The GBP/USD pair has experienced a significant pullback from its year-to-date (YTD) high of 1.3043, losing approximately 1.70% and breaking several support levels. If the pair drops below 1.2800, further declines could lead to the confluence of the June 27 cycle low and the 200-day moving average (DMA) at 1.2612-1.2622.
The Relative Strength Index (RSI) confirms that sellers are in control, trending downwards and below the 50-neutral line. Key support levels for the pair include 1.2800, followed by the 50-DMA at 1.2778, and the 100-DMA at 1.2681.
Conversely, if buyers regain momentum and push the exchange rate above the March 8 peak at 1.2893, the pair could test 1.2900 and potentially move higher.