Download our new 3Q trading advice from the DailyFX Free Trading Guides to get the full equities projection, including the fundamental view! GBP Taking on USD in a Tougher Battle GBP/USD is ending Q2 on a sour note, similar to the conclusion of Q1. The pair resisted 1.4240-50 once more, raising the likelihood of a double top. Following the Federal Reserve’s hawkish turn, the Pound has decelerated sharply, making positioning in GBP somewhat clearer, with longs liquidated. However, for the Pound, this claim is debatable, especially when monetary policy tightens and the solid UK economic outlook is reflected in the price (OIS markets price BoE hike in Q3 22). As a result, a fall below 1.3800 would be required to generate traction towards the 200DMA (1.3622), where buyers are likely to be waiting from 1.3670. (Mar-Apr double bottom). The critical 1.40 handle, on the other hand, may operate as a ceiling for the upside, making it the first hurdle for bulls to conquer. The worst of the fight in the second and third quarters may be over if Cable breaks over the even level. However, Q3 is expected to be much more choppy, with FX markets becoming more sensitive to economic data. As things stand, the risks point to drops to 1.3670 and 1.3622 rather than a breach of the February/June top, where we are more likely to meet firm demand. Daily GBP/USD Chart The EUR/GBP consolidation continues, with the ECB/BOE outlook providing guidance. For range traders, the EUR/GBP posted its narrowest range since Q1 2014 (249pip range) in Q2, but for most, it was a quarter to forget. However, if you’re anticipating for a thrilling third quarter in the EUR/GBP, you could be disappointed. The second quarter began with a false break below 0.8500, followed by a countertrend surge, and the cross hasn’t looked back since. The 0.8500 handle appears to be protected by rising trendline support from two key lows (the 2020 low and the 2021 low). As a result, bullish inclinations are expected to struggle to break through the mid-0.86s, leaving EUR/GBP to consolidate for the time being. The BoE’s August MPR and the ECB’s strategy review, both of which could provide a clearer sense of direction, will be two focus spots to watch for sparks over the quarter. Daily EUR/GBP Chart GBP/JPY: Make or BreakGBP/JPY: The GBP/JPY chart will be one to monitor in Q3, as it may face a make-or-break moment in the longer term. Through the end of the first half of the year, the multi-decade trendline drawn from the 2007 and 2015 peaks had managed to keep optimistic ambitions in check. With the Bank of England (BoE) being closer to policy normalisation than the Bank of Japan (BOJ), a hawkish turn could be enough to support the pound against this and low yielders. Monthly GBP/JPY Chart Download our new 3Q trading advice from the DailyFX Free Trading Guides to get the full equities projection, including the fundamental view!/n
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