Important events today:

29.07 18:00 UTC: USD – FOMC Interest Rate Decision.

The pair is trading around 1.3295, not far from its lowest levels since early July. The pound is constrained by weaker signals from the UK labor market and caution ahead of Thursday’s Bank of England decision. The market mostly expects rates to remain unchanged at 3.75, so the British currency needs a more convincing signal of the regulator’s readiness to continue policy tightening.

The UK’s domestic backdrop remains mixed. Inflation is still above the Bank of England’s target, but weakening demand for workers reduces the risk of sustained wage acceleration. At the same time, uncertainty surrounding future government spending and its financing methods restrains interest in the pound, especially as investors prefer the dollar ahead of the crucial Fed decision.

The US currency retains an advantage due to high yields and expectations of a hawkish Fed stance. A risk to the downside scenario would emerge if the regulator leaves rates unchanged and gives the market reasons to scale back expectations of a September rate hike. Until that happens, the pound’s internal factors are insufficient to outweigh the broader dollar momentum, making further downside in GBP-USD the priority.

Recommendations: SELL 1.3295, SL 1.3330, TP 1.3225.