GBPUSD TECHS: Sights Are On The Bull Trigger

• RES 4: 1.3681 High Jul 4
• RES 3: 1.3620 High Jul 10 
• RES 2: 1.3589 High Jul 24 
• RES 1: 1.3477 Low Aug 11
• PRICE: 1.3410 @ 15:28 BST Aug 11
• SUP 1: 1.3144 38.2% retracement of the Jan 13 - Jul 1 bull cycle
• SUP 2: 1.3041 Low Apr 14
• SUP 3: 1.3000 Round number support 
• SUP 4: 1.2945 50.0% retracement of the Jan 13 - Jul 1 bull cycle   

Prices traded higher early Monday before fading into the close. Nonetheless, recent price action builds on the gains posted after the break of the 50-day EMA on the hawkish turnout to the August BoE rate decision. This firms the speed of the recovery off the 1.3142 pullback low and signals a greater probability of a bullish reversal. For now, S/T momentum is still pointed higher, with the Jul 24 high of 1.3589 the next notable upside level. While the bounce off the pullback low persists, the more medium-term trend remains bearish - but the risk of a return to recent lows has fallen.

Takeup of the Fed's overnight reverse repo facility ticked up by around $2B to $82.2B Monday, the second consecutive daily increase but the 5th day in 6 below the $100B mark.

• ON RRP takeup has averaged $91B in the first 7 sessions of August, compared with $225B over the first 7 sessions in July.
• Helping reduce appetite for ON RRP is the rise in bill issuance since the debt limit was lifted in early July - a dynamic that is expected to keep a lid on the facility for the foreseeable future (outside of spikes typically seen at month-/quarter-end).

The Italian seasonally adjusted goods trade surplus was E4.4bln in June, comprising of a E0.5bln deficit with EU member states and a E4.9bln surplus with non-EU states. Smoothing over Q2, an export decline of 2.6% outpaced the 1.7% decline in imports, consistent with Istat's commentary on Italian Q2 GDP being dragged lower by net exports.

• Looking at mid-term trends, exports in 1H25 increased vs 2024 to constituencies including Switzerland (+13.4% Y/Y), middle eastern countries (+8.7%), and the US (+7.8%). A 10.3% Y/Y increase of exports to the US looking at June in isolation suggests that the upward here trend was continuing in latest data. H1 declines could be observed to Russia (-17.3%), Turkey (-18.2%), and China (-11.7%).
• On imports, a 31.1% H1 Y/Y increase in goods from China stood out (June in isolation was +25.8% Y/Y). More generally, imports grew strongly from non-EU countries (+8.7%) while they saw less of a clear trend from EU-countries (+1.6%).
• Looking by category, the 11.9% H1 Y/Y increase in consumer non-durable exports stands out - food should be a key component here. Consumer durables fared much worse, though, at -7.5%.
• Imports meanwhile saw increases led by consumer durables and non-durables in H1 (+7.3% and +15.8%, respectively) whilst other categories saw comparatively minor moves.