By: Michael Boutros, Sr. Technical Strategist
Sterling's rebound has found some support from an upward revision to the United Kingdom's second-quarter growth. At the same time, Michael Boutros's market assessment tied the British pound's next move to United States employment and inflation readings as markets reassessed Federal Reserve expectations. With the week, month and quarter closing together, sterling faced a close test between domestic growth support and a potentially shifting U.S. rate outlook.
Michael Boutros, StoneX Media Senior Market Analyst, assessed sterling through weekly, daily and four-hour charts while tracking the scheduled data. His multi-timeframe approach links technical levels to the United Kingdom and United States releases he identified as immediate market catalysts.
Sterling received a short-term lift from stronger United Kingdom growth, but the GDP revision arrived as the pound faced a data-heavy United States week. The United Kingdom's second-quarter growth estimate rose to 1.4% year on year from 1.2%, and Boutros linked it to the market turn, saying "an upward revision for the second quarter GDP out of the UK offering some support here." The British pound's response shows how a domestic data surprise can cushion a technical decline without confirming a change in trend. That distinction mattered because the analysis identified resistance at 1.3302 to 1.3314 as the zone sterling needed to clear for a stronger near-term recovery signal. As United States employment and inflation figures approached, the GDP upgrade offered support while the next directional test remained unresolved.
The United States data calendar mattered because markets were changing their view of Federal Reserve policy while sterling approached the end of the week, month and quarter. Boutros flagged private-sector ADP employment at about 70,000, Friday's non-farm payrolls and the core personal consumption expenditures price index. He described core PCE as "The Fed's preferred inflationary gauge", making that release central to the policy assessment he outlined. According to Boutros, futures priced a 56% chance of an October hold, alongside a growing possibility of at least a 25-basis-point hike by year-end. For sterling, that shifting rate backdrop coincided with a technical threshold, since Boutros said a weekly close above 1.3314 could support a near-term recovery while the wider outlook remained sensitive to United States data.
--- Written by Frédéric Guétin, StoneX TV Producer
--- Expert: Michael Boutros, StoneX Media Senior Market Analyst
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only. StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs. This content does not constitute an offer, invitation, or solicitation to engage in any investment activity. The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice. Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced. This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity. StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate. This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations. Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
The European Central Bank has hiked twice, but a deteriorating growth outlook is narrowing its room to go further. With the Federal Reserve tightening at a faster pace, the policy balance continues to favor the U.S. dollar over the euro.
U.S. 10-year Treasury yields are pressing into long-term resistance with overbought momentum readings across several timeframes, and the line between a sustained hold and a breakdown now shapes the path for the U.S. dollar. A bearish divergence on the daily chart adds short-term pullback risk across dollar pairs and major currency pairs.
Federal Reserve rate expectations could shift through a weaker U.S. consumer, a slowdown in AI capex or a sustained fall in energy prices. Fed pricing has stayed hawkish so far, leaving positive carry and intervention risk to keep pulling USD/JPY in opposite directions.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
