Daily Analysis GBPUSD - 28 July 2023

Market sentiment has turned negative, and the United Kingdom is experiencing a decline in resilience amid an aggressively restrictive monetary policy environment. The GBP/USD pair is facing significant challenges as UK authorities express concerns about deepening recession fears resulting from consistent interest rate hikes by the central bank. The housing sector, factory activities, and retail orders in the UK have come under pressure due to the heavy burden of higher inflation and soaring interest rates.

The higher inflation and restrictive interest rate policy are putting a strain on United Kingdom households as their real income is being sharply squeezed. Britain's housing sector, retailers, and factories are facing turbulent times due to rising borrowing costs and uncertain forward demand. Despite these restrictive factors, the Bank of England (BoE) is preparing to raise interest rates further in an effort to achieve price stability.

The GBP/USD fell due to the dollar's performance and is now approaching the next support level around the 1.2700 area. As for EUR/USD, the bullish long channel may face a challenging shift in sentiment, potentially leading to a retracement toward the levels seen in May and June.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2800	1.2750	1.2650