GBPUSD is experiencing bearish conditions due to a dovish BoE

British private sector business activity grew in June at its slowest pace since November last year, according to the latest S&P Global Flash UK PMI report.
According to Chris Williamson, chief economist at S&P Global, the slowdown partly “reflects the uncertainty surrounding the business environment in the run-up to the general election.” UK service sector inflation remains high “still evident in the survey, but will at least ease from the current 5.7% pace in the coming months.”

UK government bond yields continue to fall, boosted by dovish moves by the Bank of England. Financial markets are currently pricing in a 50/50 chance of a 25 basis point rate cut at the BoE's monetary policy meeting in August and a total cut of just under 50 basis points this year.


On the daily chart, GBPUSD has technical conditions that support the possibility of a bearish price with pressure from the newly formed short-term price channel, the price channel and the break below the price channel indicate an uptrend for GBP/ The USD is no longer technically functional.

Additionally, GBP/USD is also under pressure from the 21-day moving average (EMA21), along with the RSI pointing down but still quite far from the oversold area. This shows that there is still a lot of room for technical downside for GBP/USD.
With price activity below the 0.618% Fibonacci retracement and within the price channel, GBP/USD is expected to decline further in the near term with a short-term target level of around 1.25956 price points of the 0.50% Fibonacci retracement level.

In the short term, technical conditions lean bearish for GBP/USD and technical levels are in focus again as follows.
Support: 1.25956
Resistance: 1.26650 – 1.27400