GBP\/USD has rolled over after failing to hold above 1.3470, with short-term momentum turning lower. After trading around 1.3460, the pair briefly touched 1.3470 before falling to 1.3412, leaving scope for a retest of 1.3405, although the move has created oversold conditions. Near-term resistance is seen at 1.3445 and then 1.3460, while support at 1.3390 is described as less likely to be challenged unless the pair remains capped below 1.3470.<\/p>\n
Over a 1\u20133 week horizon, price action is still framed as a range between 1.3390 and 1.3510, even as downside momentum has picked up. The risk of a break below 1.3390 is expected to rise over the next few days if GBP\/USD continues to trade under the 1.3470 resistance level. On a longer-term basis, a weekly close below 1.3300 would open the way towards 1.2945\/1.3010.<\/p>\n
We are seeing a clear turn in GBP\/USD after it failed to hold above the 1.3470 level. This rejection lines up with recent UK GDP figures showing a meager 0.1% growth last quarter, underscoring a sluggish economy. As a result, short-term momentum has clearly shifted to the downside.<\/p>\n
Considering the increased risk of a break below 1.3390, we are looking at buying put options. A bear put spread, perhaps buying the 1.3400 puts and selling the 1.3300 puts for July expiration, offers a defined-risk way to target this move. This strategy benefits from the growing policy divergence, as the Fed remains hawkish following last week’s strong 225,000 Non-Farm Payrolls print.<\/p>\n
The 1.3470 level now acts as a strong ceiling, and we see an opportunity in selling premium around that area. A bear call spread, with a short strike around 1.3450, could be effective as long as that resistance holds. This view is supported by recent UK inflation data which, while easing to 3.1%, is not high enough to force the Bank of England into a more aggressive stance.<\/p>\n
This situation feels similar to the 2022-2023 period when aggressive Fed hikes outpaced the Bank of England, leading to significant sterling weakness. Therefore, we are closely watching for a weekly close below the 1.3300 psychological level. A break there could trigger a much larger move down towards the 1.3000 area.<\/p>\n","protected":false},"excerpt":{"rendered":"
GBP\/USD reversed below 1.3470, momentum weakens; key supports 1.3405\/1.3390, options favor bearish strategies amid Fed-BOE divergence.<\/p>\n","protected":false},"author":103,"featured_media":17035,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[67,9,10,100,58],"class_list":["post-54581","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates","tag-cable","tag-dollar","tag-forex","tag-inflation","tag-pound"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/54581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=54581"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/54581\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17035"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=54581"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=54581"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=54581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}