FundamentalOverview

The USD continues to loseground as the tariffs fears ease. In fact, tonight Trump said that he would rather not use tariffs onChina whichtriggered more weakness in the greenback.

The tariffs risk has beenthe only thing keeping a bid under the US Dollar after the US inflation data,so when that risk eases, the greenback weakens.

On the GBP side, the UK PMIs today jumped to a 3-month high althoughS&P Global noted that the economy faces a stagflationary scenario amid jobsshedding and increased inflationary pressures.

Despite that, the marketcontinues to expect a rate cut at the upcoming meeting and a total of 67 bps ofeasing by year end.

GBPUSDTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that GBPUSD is rejecting the major trendline as the sellers are stepping in witha defined risk above the trendline to position for a drop into the 1.2040level. The buyers will want to see the price breaking higher to gain moreconviction and increase the bullish bets into the 1.28 handle next.

GBPUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that we now have an upward trendline defining the current bullish momentum.If the price were to pull back into it, we can expect the buyers to lean on thetrendline to position for a break above the major trendline. The sellers, onthe other hand, will want to see the price breaking lower to increase thebearish bets into new lows.

GBPUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have another minor upward trendline defining the bullish momentumon this timeframe. The buyers will keep on leaning on it to push into newhighs, while the sellers will look for a break lower to increase the bearishbets into the next trendline. The red lines define the average daily range for today.

UpcomingCatalysts

Today we conclude the week with the Flash US PMIs.