GBP / USD had its best month in July for over a decade.
The focus is now shifting to the BOE rate decision, which will be published on Thursday.
The couple will also respond to post-Brexit talks with the US, EU and Japan.
The British pound goes on the offensive in August. The GBP / USD pair gained more than 5.5% in July, the best month in over a decade. The British pound index, on the other hand, rose by more than 5%.
BOE eyeing interest rate decision
The biggest news on pounds this week will be the BOE rate decision, which will take place on Thursday. This meeting takes place at a time when the number of coronavirus cases in the UK has decreased.
It also comes at a time when the country's economic data has been relatively strong. The property price index, mortgage data, retail sales, inflation and PMIs have exceeded analysts' forecasts.
The meeting also takes place one month after the bank's decision to increase its quantitative easing program by GBP 200 billion.
Therefore, the central bank will not be under pressure to raise or lower interest rates or even make any further decisions. Still, analysts will wait for the instruction from Andrew Bailey, the BOE governor. The key issues they will be waiting for include negative interest rates and controlling yield curves.
Analysts have shared opinions about the impact of negative interest rates. Some attribute it to the current revival of the eurozone economy, while others believe it would have a negative impact on the UK economy. In a recent statement, a Bloomberg analyst cited the UK's large financial sector.
Tough negotiations ahead
GBP / USD will also respond to a series of tough negotiations in the coming weeks. The best known are the Brexit talks, which will resume later this month. In these talks, Britain is trying to reach a trade deal with the EU, its largest trading partner. The use of these talks nowhere is high due to the differences between the UK and the EU.
The sixth The discussion round begins on August 17th and end on August 21stst. The negotiators will meet the following week to iron out important issues. The seventh round of talks then begins in September before the extraordinary meeting of EU heads of state and government in Germany. All of these talks will culminate in October and December with an EU head of state. If there is no agreement by December 31ststThe UK will act on WTO terms by default.
Great Britain is still negotiating with the United States and Japan. According to Bloomberg, it's the two sides worth over £ 39.5 billion of trade are close to an agreement. The British Department for International Affairs said:
"Both sides are committed to an ambitious schedule to reach an agreement that will go into effect by the end of 2020 if possible."
The country is also accelerating its trade talks with the United States. Indeed, Liz Truss, the UK's Secretary of Commerce, will meet her American counterparts this week to try to get a deal. Nevertheless, this deal is just around the corner significant challenges because of key issues like the NHS.
Technical forecast GBP / USD
The following daily chart shows that the GBP / USD pair has seen a strong upward trend in recent weeks. The price has approached the Fibonacci retracement level of 61.8%. It is also slightly above the 50-day and 100-day exponential moving averages. Therefore, the uptrend is likely to continue as the bulls seek the next resistance at 1.3290.