During the Asian session on Monday, the GBPUSD currency pair manages to regain some of the ground it had previously lost, rising to around the 1.2860 level.

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• GBP/USD recovers early lost ground to the 1.2860 area during the Asian session on Monday.

The pair currently trades last at 1.28584.

The previous day high was 1.2905 while the previous day low was 1.2816. The daily 38.2% Fib levels comes at 1.285, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2871, expected to provide resistance.

The GBP/USD pair attracts some follow-through buying and bounces off the 1.2815 mark on Monday. The major pair currently trades around 1.2860 in the early Asian session. Market players prefer to wait to be sidelined ahead of the key Federal Open Market Committee (FOMC) meeting on Wednesday.

The Office for National Statistics (ONS) reported on Friday that the UK monthly Retail Sales data rose 0.7% in June vs. 0.1% in May and above the 0.2% expected. Meanwhile, annual Retail Sales data contracted by 1.0% against expectations of -1.5% and -2.1% prior. Additionally, the monthly headline Consumer Price Index expanded 0.1% versus the consensus of 0.4% and 0.9% prior.

Investors were divided on the rate at which the Bank of England (BoE) will raise interest rates on August 3. Market participants expected BoE Governor Andrew Bailey to raise interest rates by 50 basis points (bps), but due to the softer inflation data, a group of investors is leaning towards a 25 bps rate hike.

On the US Dollar front, the Unemployment Claims fell below expectations and marked the lowest reading since mid-May. This data raised market anticipation about the possibility of future Fed tightening policy despite mixed findings from the US Retail Sales figure. The market priced in a 25 basis point rate (bps) hike on Wednesday. However, investors are repricing another Fed rate increase after the July meeting, causing the Greenback to rebound. The anticipation for the Fed to raise rates after the July meeting increased to 28% from 15.9% last month, according to the CME FedWatch Tool.

Later in the day, the UK Flash Manufacturing and Service PMI will be due. Market participants will shift their focus to the FOMC meeting on Wednesday. The hawkish stance from the Fed could weigh on GBP/USD ahead of the BoE meeting scheduled for August 3.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2862 at the time of writing. Pair opened at 1.2853 and is trading with a change of 0.07 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2844, 50 SMA 1.2659, 100 SMA @ 1.2508 and 200 SMA @ 1.2246.

The previous day high was 1.2905 while the previous day low was 1.2816. The daily 38.2% Fib levels comes at 1.285, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2871, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2811, 1.2769, 1.2723
• Pivot resistance is noted at 1.29, 1.2946, 1.2988

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