Daily Analysis GBPUSD - 4 July 2023

The GBP (Pound Sterling) is experiencing volatile movements around the 1.2700 level, with investors eagerly awaiting the release of key Service PMI numbers following better-than-expected Manufacturing PMI data. The GBP/USD pair is lacking clear direction as the overall market sentiment remains subdued due to the Independence Day holiday in the United States. Investors' primary focus will be on the Bank of England (BoE) policymakers' guidance regarding interest rates.

The United Kingdom's economic outlook remains positive, despite the challenges confronted by BoE policymakers and the UK government, including persistently high inflation above 8.5% and the limited efficacy of tight monetary policy. Household demand remains robust, even in the wake of the Bank of England's decision to raise interest rates.

In the short term, the GBP/USD pair exhibits a downward trend finding resistance around the bearish descending trend line, with the support level being observed around 1.2600-1.2550. A break below this level could potentially signal the end of the current bullish long-term trend.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3200	1.3000	1.2800	1.2650	1.2540	1.2460