The Above Line Chart Is of GBPUSD (Closing Spot) from 01st Jan 2024 to 25th Jun 2024

Sterling rose to a high of $1.2859 and failed to consolidate the gains above this level and fell to a six-week low of 1.2680 yesterday as investors are on the side-lines assessing the BoE’s monetary policy and the country’s political future. The Bank of England kept its interest rates unchanged, but has since raised hopes of a rate cut in August, going by the comments from the policy makers. Domestic inflation has also dropped to the BoE’s target of 2%, but worries remain about the Service Sector inflation, which still rule above 3% level. GDP numbers and Retail sales number to be released at the end of the week will give further insight into the UK’s economy.

Meanwhile, a scandal called "Gamble-gate," involving Prime Minister Rishi Sunak's aides betting on the election date, has caused significant political turmoil and threatens to overshadow the remainder of the campaign, with Labour predicted to win by a large margin.

GBPUSD is consolidating above the 1.2622 support level and sustained fall below this level would trigger steeper losses towards 1.2445 level. Above 1.2739 resistance, level would argue for a pullback will avert the current downtrend and re test the 1.2859 resistance.