The GBPUSD pair is nearing a crucial support level as the market anticipates upcoming key financial data and announcements. There was a resurgence of the US dollar, though no distinct catalyst was evident. The GBPUSD remains within a range awaiting trends. The UK reported mixed data: a higher-than-expected CPI and weaker employment figures. There is an 87% probability of a 25 basis points cut in the upcoming August meeting, with expectations of two rate reductions by year-end.<\/p>\n
On the daily chart, GBPUSD is approaching support around the 1.3368 level. This support is part of a major head and shoulders pattern. Buyers may buy around this support, while sellers aim for a break lower toward the 1.3140 level. The 4-hour chart provides limited insights as the support has not been reached. A closer look at the 1-hour chart reveals a minor downtrend signalling bearish momentum. Sellers could find better setups around the trendline and 1.3452 level. Buyers will watch for a rise towards the 1.36 mark.<\/p>\n
Key upcoming events include US Job Openings and Consumer Confidence data, followed by US Q2 GDP, FOMC rate decision, PCE price index, and NFP report in subsequent days.<\/p>\n
We are facing a week of significant event risk, headlined by the Federal Reserve’s decision and the jobs report. This environment suggests that buying options could be a prudent way to define risk amidst the expected volatility. Historically, the pair has seen sharp moves of over 100 pips in the 24 hours following such announcements.<\/p>\n
Those positioning for a stronger dollar should watch for a break of the 1.3368 support level. With recent U.S. Core PCE inflation holding firm at 2.8% and the last jobs report adding a robust 272,000 positions, any hawkish surprise could trigger this move. A break could see traders purchase put options or sell futures, targeting the 1.3140 area.<\/p>\n
Conversely, we see the potential for buyers to defend that key level, especially since the short dollar trade is crowded. While UK inflation recently hit the central bank’s 2% target, strong wage growth continues to complicate the path for rate cuts and could support the pound. Traders anticipating a bounce could consider buying call options with strikes above 1.3400, looking for a rally towards the 1.36 handle.<\/p>\n
Given the uncertainty before the upcoming catalysts, a long straddle or strangle option strategy could be effective. This involves buying both a call and a put option, profiting from a large price move in either direction, regardless of which way the pair breaks. This is a pure volatility play, betting that the new data will force the market out of its current range.<\/p>\n
From a risk management standpoint, we believe using the identified technical levels is crucial. For bearish positions, a stop-loss could be placed above the minor downward trendline near the 1.3452 swing level. For bullish plays, risk is clearly defined just below the major support, ensuring that a decisive breakdown does not lead to outsized losses.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBPUSD nears key support amid mixed UK data, dollar strength, and anticipation of major US reports.<\/p>\n","protected":false},"author":62,"featured_media":17035,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27435","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=27435"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27435\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17035"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=27435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=27435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=27435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}