Markets are still pricing in a greater chance of a supersized 75 bps Fed rate hike move at the September policy meeting. This remains supportive of elevated US Treasury bond yields, which, in turn, should assist the USD to stall its corrective pullback from a two-decade high touched on Thursday. Apart from this, a bleak outlook for the UK economy further contributes to keeping a lid on any meaningful upside for the GBP/USD pair, at least for now.
Nevertheless, spot prices remain well within the striking distance of the lowest level since March 2020 set the previous day and seem vulnerable to sliding further. Bearish traders, however, might prefer to wait for a convincing break below the 1.1500 psychological mark before positioning for an extension of the depreciating move. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the GBP/USD pair is to the downside.
Nevertheless, spot prices remain well within the striking distance of the lowest level since March 2020 set the previous day and seem vulnerable to sliding further. Bearish traders, however, might prefer to wait for a convincing break below the 1.1500 psychological mark before positioning for an extension of the depreciating move. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the GBP/USD pair is to the downside.