GBPUSD stayed in focus as the US dollar dropped to a two-month low and the British pound climbed to a 15-month high.
The move came after Federal Reserve officials suggested that the current tightening cycle was moving closer to its final stage.
At the same time, stronger UK wage growth supported the pound and kept GBPUSD buyers active.
The main view was short-term pullback first, then possible bullish continuation from a demand zone if buyers confirmed again.
US Dollar Hits Two-Month Low as GBP Rises
On Tuesday, the US dollar weakened and reached its lowest level in two months.
This happened after several Federal Reserve officials signaled that the central bank was getting closer to the end of its tightening cycle.
The British pound moved in the opposite direction. It rose to a 15-month high after wage growth came in stronger than expected.
Strong wage data can support the pound because it may keep pressure on the Bank of England to maintain a firm policy stance.
Important Fundamental Release
Several Federal Reserve officials said that more interest-rate hikes may still be needed to fight inflation.
However, they also noted that the end of the current monetary tightening cycle was drawing near.
This message pressured the US dollar. The dollar index moved toward the 101.66 area as traders adjusted their expectations for future rate hikes.
When the market expects fewer future rate hikes, the dollar can lose strength. This can support pairs like GBPUSD.
Traders who want to understand this relationship can read our guide on how interest rates affect forex trading.
News source referenced in the original post: Reuters.
Weekly Price Action View
In the weekly forecast, the expected plan was simple.
GBPUSD could move lower in the short term, then resume its bullish direction from a demand zone.
This type of movement is common in a bullish market. Price pulls back, collects liquidity, and then continues higher if buyers defend the right area.
A pullback inside a bullish trend is not always bearish. It can become the setup area for the next upside move.
Video Analysis
The embedded video explains the weekly GBPUSD forecast, demand zone plan, liquidity area, and possible continuation setup.
GBPUSD Demand Zone Plan
In the video analysis, GBPUSD was expected to continue higher after a brief pullback.
The key area was a demand zone. This was the zone where buyers could return after price completed the short-term retracement.
If we switch to the one-hour chart, price had already broken a recent high. That showed buyers had control before the pullback started.
However, price was reacting after that higher high. This suggested a short-term bearish movement could happen before the bullish move continued.
Liquidity Zone Before Demand
Before the main demand area, there was also a liquidity zone.
Price could test this zone first to collect liquidity. After that, the bullish continuation idea could become stronger.
At the bottom of the bullish movement, another demand zone was also visible.
For this reason, traders needed to prepare for both scenarios. Price could react from the first liquidity area, or it could move deeper into the lower demand zone.
Smart Money View
From a Smart Money view, the chart showed a clear liquidity and demand-zone plan.
Price had taken liquidity from previous lows and then broke a high. This created a stronger bullish structure.
The pullback was important because it could return price to a better buying area.
Traders should not enter only because the market is bullish. The better plan is to wait for price to reach the demand area and show confirmation.
Trading Plan for GBPUSD
The trading plan was to wait for a short-term pullback into the demand zone.
If buyers reacted from that area, GBPUSD could continue toward the next supply zone.
If price failed to hold the demand zone, traders needed to wait for new structure.
- Main bias: Bullish while demand zones hold.
- Short-term view: Possible bearish pullback first.
- Key area: Demand zone after liquidity collection.
- Target area: Next supply zone.
- Risk point: Strong break below demand weakens the bullish plan.
Risk and Execution View
A bullish outlook still needs proper execution.
Traders should wait for confirmation around the demand zone. A clean reaction can give better timing.
The stop loss should be placed where the trade idea becomes invalid. It should not be placed randomly.
The target should also be planned before entry. In this setup, the next supply zone was the main upside target.
For better risk planning, traders can review our guide on how to set a stop-loss order.
Signal Planning View
This GBPUSD setup needed patience.
A good signal plan should include entry logic, stop loss, target, and trade-management rules.
Traders who want structured trade ideas with planned entry, stop loss, take profit, and trade-management updates can learn more about our forex signals service.
Final Thoughts
GBPUSD had strong fundamental support as the pound rose and the dollar weakened.
The technical view also supported a bullish plan, but only after a short-term pullback.
The main focus was the demand zone. If buyers defended that area, the pair could continue toward the next supply zone.
Traders needed to prepare for both outcomes. If price broke below demand, the bullish setup would weaken and a new structure would be needed.
Editorial Note: This post was prepared as a PreferForex GBPUSD weekly forecast for July 11, 2023. It explains the US dollar weakness, pound strength, demand-zone plan, liquidity view, video analysis, and bullish continuation scenario.
Risk Disclaimer: Forex trading involves risk and can result in financial loss. This post is for educational and informational purposes only and does not constitute financial advice, investment advice, or a guarantee of trading results. Always trade with proper risk management.