GBPUSD Before US GDP

Fundamentally with the Powell pivot last week when Fed Chair Powell said that 'the time has come for policy to adjust' investors have been selling US Dollars in preparation for a September 18th US rate cut. For the UK, investors have been warned that taxes will rise in the October budget. Alongside a 10% rise in energy costs. So, Bloomberg gives a 129% chance of a US rate cut (implying a 100% chance of a 0.25% rate cut and a 29% chance of a 0.5% cut) with UK rates being held steady in September.

But, US GDP is released today (Thursday) and US Personal Consumption Expenditure tomorrow. Having achieved and exceeded our first target (1.3045) and with GDP possibly continuing to show US economic outperformance it may be time for GBPUSD to take a breather. Could we see a corrective move lower?

If we do see a move lower support is at 1.3040 1.2970 and 1.2895. If/when these support levels remain intact price can resume its uptrend to target 1.3400. The Elliott Wave analysis will remain bullish as long as 1.2660 remains intact. If price trades below this support level we shall have to adjust the analysis to allow for more weakness.

I hope it helps.