The pair has fallen from 1.3228 so far in this session 1 Aug
General USD demand and generally softer than previous HPI data sees GBPUSD down to 1.3207 looking to test support/demand around 1.3200.
EURGBP remains underpinned around 0.8940 helping to cap cable but itself can't get back up through the 0.8965 area.
I've not been getting involved too much lately preferring to play long EURGBP instead. My long-held view that the Fed will fall short on original bullish rate hike rhetoric has now been compounded by the White House implosion which, even by my own low expectations, has broken new ground.
I still say the UK and Brexit is a ticking time-bomb and if we look at the pound generally we see some inherent weakness apart from versus the rapidly tumbling CHF lately.
The on-going US$ softer tones will be frustrating many cable bears and with the BOE meeting this week bringing with it some talk of rate hikes it's prudent to be cautious. I can't see that the Old Lady can hike though for aforementioned reasons re household debt and falling disposable incomes. Yes inflation needs to be contained but by the BOE's own admission that will start to turn lower again soon.
We'll see in due course but in the meantime I expect GBPUSD to find support at 1.3100 and should hold 1.3300 if not 1.3250. I remain poised to sell when conditions become more favourable but finding a decent reason to be long of USD right now is a tough ask.
GBPUSD 60m
