The British Pound and the US Dollar are remaining steady at a level of 1.30853 after retreating from a 15-month peak.

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• GBP/USD treads water after reversing from 15-month high.

The pair currently trades last at 1.30853.

The previous day high was 1.3142 while the previous day low was 1.309. The daily 38.2% Fib levels comes at 1.311, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3122, expected to provide resistance.

GBP/USD remains sidelined around 1.3090 amid Monday’s early Asian session, after reversing from the highest levels in 15 months. In doing so, the Pound Sterling struggles to cheer news of the UK’s biggest trade deal after Brexit due to the economic fears surrounding Britain. Also challenging the Cable buyers are the latest doubts on the market’s concerns about the Federal Reserve (Fed) during the two-week blackout period for the US central bank policymakers ahead of the late July monetary policy meeting.

The UK’s official joining of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), unveiled Sunday, marks London’s biggest trade victory since Brexit. However, a slump in the UK’s home price and fears of witnessing more medical strikes challenge the trade optimism.

Furthermore, recently mixed UK data and the upbeat US consumer inflation clues also prod the GBP/USD bulls, allowing the Cable pair to retreat after posting the biggest weekly gain since November 2022.

In the last week, the UK Gross Domestic Product (GDP) slid to -0.1% MoM for May versus -0.3% expected and 0.2% prior. Further, the Industrial Production for the said month slumped to -0.6% MoM from -0.2% previous readings and -0.4% market forecasts whereas the Manufacturing Production registered -0.2% MoM figure for May compared to -0.5% expected and -0.1% prior.

Following the mostly downbeat data, UK Chancellor Jeremy Hunt said that “while an extra Bank Holiday had an impact on growth in May, high inflation remains a drag anchor on economic growth.” The policymaker also added that the best way to get growth going again and ease the pressure on families is to bring inflation down as quickly as possible. Our plan will work, but we must stick to it.

On the other hand, the preliminary reading of the University of Michigan’s (UoM) Consumer Confidence Index rose to 72.6 from 64.4 in June, versus the market’s expectations of 65.5. Further details suggested that the one-year and 5-year consumer inflation expectations per the UoM survey edged higher to 3.4% and 3.1% in that order versus 3.3% and 3% respective priors. Before that, the US Consumer Price Index (CPI) and Producer Price Index (PPI) for June dropped to 3.0% and 0.1% on a yearly basis from 4.0% and 0.9% YoY in that order, which in turn drowned the US Dollar and propelled the EUR/USD pair toward the highest level since February 2022.

Further, comments from US Treasury Secretary Janet Yellen and New Zealand Chris Hipkins flag fears emanating from China and put a floor under the US Dollar, which in turn allows the GBP/USD bulls to take a breather.

While portraying the mood, S&P500 Futures print mild losses whereas the US Treasury bond yields lick their wounds after witnessing a downbeat weekly close.

Moving on, the GBP/USD pair traders should keep their eyes on this week’s UK inflation data, as well as the US Retail Sales, for clear directions as markets seem uncomfortable with the Bank of England’s (BoE) hawkish policy amid economic fears.

Although the overbought RSI (14) line triggered the GBP/USD pair’s pullback, a nine-week-old previous resistance line, around 1.2985 at the latest, restricts the short-term Cable pair upside.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.3087 at the time of writing. Pair opened at 1.3092 and is trading with a change of -0.04% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2795, 50 SMA 1.262, 100 SMA @ 1.2461 and 200 SMA @ 1.2201.

The previous day high was 1.3142 while the previous day low was 1.309. The daily 38.2% Fib levels comes at 1.311, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3122, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3074, 1.3055, 1.3021
• Pivot resistance is noted at 1.3127, 1.3161, 1.3179

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