US July interest rate cuts are a foregone conclusion
The dollar held above the two-and-a-half-month low on Tuesday, as the bets on the US Federal Reserve’s (FED) rate cuts heat up. The market expects the Federal Reserve to cut interest rates in June by only about 20%, but the probability of interest rate cuts in July is almost 100%. The Fed policy meeting is scheduled to be held next week. The recent dovish remarks of the Fed officials and weak economic data have raised expectations for a US interest rate cut. However, the market is still paying attention to the G20 summit held in Osaka, Japan on June 28-29. US President Trump said on Monday that if he could not reach a trade agreement with Chinese President Xi Jinping at the G20 summit, he was prepared to impose a new round of punitive tariffs on Chinese imports.
Sterling fell on Monday, data released previously showed that the UK economy slowed sharply in April, affected by the uncertainty of the British Brexit, manufacturing became the weakness of the economy. After the UK’s car production hit its biggest record in record, the UK’s economy contracted sharply as manufacturers could not reverse the UK’s planned closure of the factory due to the expected Brexit. The pound once fell to $1.2651. Recently, the pound was stuck near $1.27. Investors are waiting for the results of the Conservative Party. The British Conservative Party vote will begin on Thursday, nominating popular candidates, and Johnson, a well-known suspected European faction, may raise the risk of no agreement to leave the European Union.
As seen in the technical chart, the RSI and the stochastic index have seen a rebound, the MACD indicator has also broken the signal line, and the short-term or expected GBP/USD is higher. The lower support is expected to be at the 1.2650 level, and the next level is seen at 1.2550 and the low at the beginning of the year at 1.2436. In terms of resistance, based on the cumulative decline in May, the rebound level of 38.2% was 1.2795, 50% and 61.8% were 1.2865 and 1.2940. As for the 1.30 mark, it is also a reference for eye resistance.