Australian exchange investment, the pound against the US short-term support at 1.2627, this week's data will affect the trend?

On August 7, James Skinner wrote that entering the new week, the pound against the dollar was supported near 1.2627 in the short term, and the exchange rate was well balanced near the middle of the medium-term equilibrium range (1.20 - 1.33), but the short-term outlook depends on the market's interest in carry trades and the UK economic growth data released on Friday.

The pound has recorded losses against the strong dollar for nearly a month, but the coming days could benefit from technical support near 1.2627 on the chart, which has been repeatedly tested in the sell-off following the Bank of England's interest rate decision last Thursday.

But with the pound having reversed more than 50% of its second 25% gain against the dollar in July, price action in the coming days will be a key determinant of whether the overall recovery from last year's record low will continue or face a deeper setback.Shaun Osborne, chief FX strategist at Scotiabank, wrote: "The UK-US spread has narrowed from its peak in early July, but sterling remains positive, which should help." He added in Friday's market commentary: "Intraday price action has weakened again, with sterling gains capped at 1.2745, which will disappoint sterling bulls."

Sterling's rally against the dollar in recent months has been fuelled by a sharp rise in interest rates by the Bank of England, whose policy decision last week to raise interest rates to 5.25 per cent has put the UK second in the G10 in borrowing costs behind the US and is likely to cement sterling's appeal as a "carry trade" candidate.

In recent months, bank analysts in North America and Europe have been the most enthusiastic proponents of buying the pound, but a sharp pullback in sterling against the dollar from mid-July above 1.30 could put it at some kind of trend inflection point on the charts.

Brad Bechtel, global head of FX at Jefferies, said in Friday's market commentary: "The 100-day moving average is around 1.2585, and a breakout would move towards the 200-day moving average around 1.2317, which is also the range low for the pair's full-year upside channel."

He added: "Not sure if we will have enough data today to test these levels, after the recent sell-off since July 14 when everyone turned bearish on the dollar, the pair could consolidate a bit. If it does go higher, I will sell,Because I think GBP/USD will indeed test the 200-day moving average around 1.2317 in the coming weeks。”

The recent decline puts the pound almost squarely at the midpoint of its current medium-term equilibrium or "fair value" range, which spans between 1.2015 and 1.3353 when the pound discounts past and current inflation rates, interest rates, and their respective spreads against the dollar.

ButHow the pound-dollar trend plays out will depend largely on whether economists have underestimated the expected rebound in US inflation in July, with the latest data due on Thursday, and how the UK economy performs on Friday in line with forecasters' expectations.

Tom Kenny, senior economist at ANZ, said: "We expect the headline and core CPI to rise 0.2 per cent month-on-month in July."

Economists widely believe that U.S. inflation will rise from 3% to 3.3% in July on Thursday, the first increase in more than a year, while the more important core inflation rate is expected to fall from 4.8% to 4.7% last month.

Although the Federal Reserve has signaled that its interest rate cycle is coming to an end and the threshold for further increases in borrowing costs is high, the dollar tends to rise as a result of higher-than-expected inflationIf there is any early rebound in Thursday's data, it could be a concern for the pound.

If Friday's release of UK GDP figures for June and the second quarter challenges market optimism about the outlook for the UK economy and the outlook for further interest rate hikes by the Bank of England in the coming months, there is also a risk of further setbacks for the pound against the dollar ahead of the weekend.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The market has come a long way towards our view over the past month but is still digesting expectations of two 25 basis point rate hikes in September and November. We wouldn't rule this out but the near-term outlook for macro data suggests the bigger risk in our forecast is that the Monetary Policy Committee (MPC) just keeps the bank rate at 5.25 per cent."GBP/USD daily chart

At 15:26 on August 8, Beijing time, the pound was trading at 2759/60