GBPUSD: SELL 1.3620, SL 1.3640, TP 1.3520 | 08 July 2025

Events to pay atttenyion to today:

09:00 EET. GBP - Change in retail sales

GBPUSD:

The GBP/USD pair is starting the new week on a subdued note, fluctuating within a narrow range around the 1.3600 mark during the Asian session amid mixed fundamental signals.

The British pound (GBP) received some support last week after Prime Minister Keir Starmer said that Chancellor Rachel Reeves would remain in her post for the foreseeable future. However, the growing likelihood of a rate cut by the Bank of England (BoE) as early as August is having a negative impact on the GBP/USD pair. In fact, BoE Governor Andrew Bailey said that interest rates are moving downwards, while Monetary Policy Committee (MPC) member Alan Taylor called for faster rate cuts amid the risk of a hard landing for the British economy.

However, the decline in the GBP/USD pair is still being held back by the underlying bearish sentiment towards the US dollar (USD). Investors remain concerned that US President Donald Trump's sweeping bill to cut taxes and increase spending will lead to an explosion in the federal deficit and exacerbate the US's long-term debt problems. This, along with growing expectations that the Federal Reserve (Fed) will resume its cycle of rate cuts in the near future, is keeping the US dollar close to its February 2021 low.

Investors will therefore be closely studying the FOMC meeting minutes, which will be published on Wednesday, for clues about the Fed's rate cut path, which will stimulate demand for the US dollar and give a significant boost to the GBP/USD pair.

Trading recommendation: SELL 1.3620, SL 1.3640, TP 1.3520

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