FX.co ★ Crude | GBP/USD

The GBP/USD pair initiated the new trading week with another decline, marking its third consecutive session of losses and pushing it below the critical 1.3400 level to a new ten-week low. This sustained depreciation of the British Pound is largely attributable to a broad-based rebound in the U.S. Dollar, which, after months of weakness, has found renewed strength. The Pounds slide has seen it break below a significant uptrend line, signaling a notable shift in its technical landscape. While major economic data releases from the UK remained scarce at the start of the week, the focus for GBP traders is firmly across the Atlantic, where a slew of high-impact US data and events are set to unfold. Early Wednesday morning, the market will digest the highly anticipated US Q2 GDP data. Analysts are forecasting a robust rebound in GDP growth to an annualized rate of 2.4%, a significant turnaround from the -0.5% contraction observed in the first quarter. Concurrently, the GDP price index is expected to show a moderation, declining to 2.4% from the previous 3.8%. Following the GDP release, attention will immediately shift to the latest interest rate decision from the Federal Reserve. The Fed finds itself under intense and public pressure from the Trump administration to cut interest rates as swiftly as possible, with President Trump even advocating for an aggressive 3 percentage point reduction in the federal funds rate. Despite these protests from the White House, the consensus among economists and market participants is that the Fed will likely maintain interest rates unchanged this week. However, expectations for a 25-basis-point rate cut in September remain robust, with the CME FedWatch tool indicating nearly a 62% probability of such a move.

Further insights into the US economic picture will arrive on Thursday with the release of Junes core Personal Consumption Expenditures (PCE) inflation data. Headline inflation has been particularly volatile in the second quarter, largely influenced by the Trump administrations erratic trade and tariff policies. Core PCE inflation, the Feds preferred measure, is anticipated to show a modest increase of 0.3% month-over-month in June, up from 0.2% previously. The weeks economic highlights will culminate on Friday with the release of the latest US nonfarm payrolls (NFP) data. The median forecast suggests a slight deceleration in job creation for July, with investors expecting around 110,000 net new jobs, down from 147,000 in June. From a technical standpoint, the GBP/USD pairs recent weakening is indicative of accelerating bearish momentum. The pairs failure to breach the key 1.3800 level and its inability to hold onto critical technical levels in early July have paved the way for this retreat below 1.3500. Having broken a strong uptrend line, the pair is now gravitating towards the significant 200-day exponential moving average (EMA), currently positioned around 1.3130. A decisive break below this long-term moving average would signal a profound shift in the pairs underlying trend, potentially opening the door for further substantial declines.