Market Analysis: The GBP/USD Exchange Rate Falls to a Month’s Minimum

<img src="https://fxopen.com/blog/en/content/images/2023/08/GBPUSD.jpeg" alt="Market Analysis: The GBP/USD Exchange Rate Falls to a Month’s Minimum" /><p>Yesterday and today, the GBP/USD rate fell below 1.27 for the first time since July 6. A number of factors contributed to this:</p><ul><li>rising bond yields amid downgrade of the US rating by Fitch;</li><li>strong data on the ADP labor market — the number of jobs in the US, excluding the agricultural sector, increased by more than 300k over the month;</li><li> market expectation of news from the Bank of England, which will publish its interest rate decision today at 14:00 GMT+3.</li></ul><p>According to Reuters, forecasts for the UK economy are disappointing. Market participants expect a 14th rate hike by the Bank of England by 0.25%.</p><figure><img src="https://lh6.googleusercontent.com/LqFLRcRj4m1V0YU69q5EFpe9TmoaUT_Ltjs_cUOPxhKo3rj0bXjg7jLVDAWD4ZOvb044d2gvlfvs4ahGYpozpfpRrzkLNzJWDbbn86dRUpVQNLxkhKvEx5aB23y–CjQJIwBYP4kLiT_HcBYZdXklso" alt="Market Analysis: The GBP/USD Exchange Rate Falls to a Month’s Minimum" loading="lazy" /></figure><p>Technical analysis of the GBP/USD chart shows that:</p><ul><li>summer peaks formed an important head-and-shoulders pattern;</li><li>the neckline, which can be drawn through the median line of the ascending channel, has already been broken after a weak rebound in the last days of July.<br></li></ul><p>The pound, which looks weak against the US dollar, may be supported by:</p><ul><li>encouraging words from the head of the Bank of England;</li><li>block of support formed in the area of 1.2600 from the low of June, the lower border of the channel and SMA (100).<br></li></ul><p>Get ready for bursts of volatility in the GBP/USD market.</p>