GBP/USD: forecast for Jul 27 - Aug 2
The unofficial race between the Fed and the BOE to become the first bank who will hike rates has resumed. Hawkish Monetary policy committee minutes released last week strengthened the market expectations for a UK rate hike in November 2015. British economists switched their focus to the risk of an inflation rally. However, for now the UK CPI stays at 0%, creating some skeptics on the market.
This week traders were also disappointed by the downbeat retail sales. The indicator fell by 0.2%, confirming the slowdown in economic activity. On the new week the economic calendar is rather light with the UK GDP in focus on Tuesday. Economic growth is expected to have accelerated from 0.4% in Q1 to 0.7% in Q2.
GBP/USD will be driven by the news from the States and UK. For now, the pair stays in a medium-term bullish channel. Break below the major support of 1.5400 could confirm the bearish dominance. Resistance is seen at 1.5670.