Will GBP/USD Follow the 100-MA Trend Amid Key Economic Reports?
25 July 2024
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GBP/USD traders are closely monitoring the UK’s July Manufacturing and Services PMI, as well as key U.S. economic reports, including the Q2 2024 GDP and the PCE Price Index.
The decline in inflation in June suggests that the Fed’s efforts to control prices are effective, possibly leading to rate cuts in September. However, markets are expecting the federal funds rate to remain unchanged next week.
On Wednesday, GBP/USD traders will particularly focus on the UK’s July Manufacturing and Services PMI, which is anticipated to show slight improvements.
More significant data will come from the U.S., with the annualized Q2 2024 GDP and the PCE Price Index. The Fed’s preferred inflation measure likely cooled in June, indicating its strategies to curb inflation are effective, potentially setting the stage for rate cuts in September.
The market anticipates the Fed will maintain the federal funds rate next week, but a rate cut in September is expected, according to the CME Group’s FedWatch tool.
GBP/USD continues to decline from its monthly high of 1.3045, causing the Relative Strength Index (RSI) to retreat from overbought territory. The pair found support after briefly dipping below 1.29 and may follow the positive slope of the 100-period SMA.
