The British Pound is holding steady against the US Dollar as the North American session on Friday begins without any changes. Despite recent political turmoil, there’s a positive outlook for the Pound, thanks to confidence in the UK’s financial situation. Next week, data releases such as trade figures and industrial production will influence the Bank of England’s policy decision on August 7. Markets are expecting a small rate cut of 22 basis points in August, totaling 54 basis points by the end of the year.

GBP Trading Range

The GBP trend remains positive, but momentum is slowing down. The Relative Strength Index (RSI) is near the neutral zone around 50. The 50-day moving average is at 1.3474, which acts as an important support level. It trades between a support level of 1.3600 and a resistance level of 1.3780. The EUR/USD is stabilizing below 1.1800 with light trading. GBP/USD holds above 1.3650 even as the US Dollar struggles. Meanwhile, gold is set to gain for the first time in three weeks, but still under recent highs. Cryptocurrencies like Bitcoin, Ethereum, and Ripple are close to all-time highs, with Ethereum and Ripple breaking significant resistance levels. This indicates that, despite political tensions, the Pound is performing fairly well against the Dollar. The market’s response has been stable rather than volatile, showing a reasonable level of trust in the UK’s financial status. The fiscal side is reassuring to those wondering if it’s time to move away from Sterling. Next week’s economic releases will bring more clarity, especially the trade and production data. These will likely shape expectations ahead of the Bank of England’s decision in early August. Current expectations suggest a gradual reduction in rates rather than a sharp drop, with investors favoring a slow approach over the coming months. This makes monetary policy more predictable for the second half of the year.

Technical Indicators and Market Sentiment

With the RSI around 50, the short-term outlook is uncertain. Currently, technical indicators show a slowdown in upward momentum, not a complete reversal. We are closely monitoring the 1.3474 mark, which aligns with the 50-day moving average. This level is holding strong and should continue to provide stability unless overall market sentiment changes drastically. On the upside, 1.3780 has proven to be a tough barrier. Unless upcoming data surprises the market, prices are likely to move between these two points. The EUR/USD’s slower movement under 1.1800 indicates that trading activity is light, which is expected for this time of year. The Dollar is weakening, partly due to softer economic indicators from the US and partly because of expectations that the Federal Reserve will ease its stance to encourage growth. Gold has managed to gain some ground. While it hasn’t reached new highs, it’s also not falling back as it did before. Haven demand hasn’t surged yet, but there is potential for gains if real yields keep dropping. In the realm of digital assets, both Ethereum and Ripple have surpassed key resistance levels, suggesting growing confidence among investors. These advancements show continued interest, although there is increased risk due to assets being near long-term highs, especially if market sentiment or regulatory news changes. At this point, we are adopting a responsive approach rather than a predictive one. Reacting effectively will be crucial, especially with British economic data coming next week. Traders should pay close attention to where implied volatility differs from historical trends. While following trends has been successful recently, any changes in upcoming reports may favor flexibility over early actions. Timing trades around data releases and maintaining a tighter risk strategy could be more effective than chasing recent profits. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now