British Pound bears retain control near July lows amid Fed-BoE divergence
The GBP/USD pair sticks to a mildly negative bias for the fourth straight day, trading around the 1.3230-1.3225 region during the Asian session on Thursday, near its lowest level since early July, touched the previous day.
The British Pound (GBP) maintains a bearish stance, hovering near its July lows against the US Dollar (USD) as the Federal Reserve (Fed) and the Bank of England (BoE) present contrasting outlooks. On Thursday, the GBP/USD pair traded around 1.3230-1.3225, marking the lowest level since early July. The bearish sentiment chiefly stems from the BoE's cautious stance amid stagflation concerns and mixed UK business activity data released earlier in the week.
Meanwhile, the USD strengthens on expectations of further interest rate hikes by the Fed, buoyed by robust US economic growth and soaring bond yields. The current technical landscape shows GBP/USD struggling below the 100-day Simple Moving Average and the 78.6% Fibonacci retracement level, with key support at the recent swing at 1.3139.
The dominant barrier on the upside is the 78.6% Fibonacci level at 1.3254, with resistance rising towards 1.3344, 1.3408, and eventually the 100-day SMA at 1.3428.
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