The British pound has continued rising in the past few months.
- Buy the GBP/USD pair and set a take-profit at 1.2600.
- Add a stop-loss at 1.2355.
- Timeline: 1-2 days.
- Set a sell-stop at 1.2422 and a take-profit at 1.2300.
- Add a stop-loss at 1.2550.
The British pound drifted upwards on Monday and Tuesday morning ahead of key economic numbers from the United States. The GBP/USD pair rose to a high of 1.2477, the highest point on April 14. It has jumped by about 1% above the lowest level last week.
There will be two important economic data from the United States. The Federal Housing Enterprise will publish the housing numbers for the month of February. Economists expect that the house price index dropped by 0.2% in February after rising by 0.2% in the previous month.
Like in other countries, the housing sector in the US has been under pressure in the past few months because of the rising interest rates. The US will also publish the latest housing starts, building permits, and new home sales numbers.
Economists polled by Reuters expect the data to show that new home sales dropped to 630k in March. They also expect that the building permits dropped to 1.43 million in March.
The GBP/USD pair will also react to the upcoming US consumer confidence data. Economists polled by Reuters expect the data to show that consumer confidence dropped from 104.2 to 104 as inflation remains at an elevated level.
These numbers are important because the Federal Reserve has committed to be data-dependent when making its interest rate decision. Housing, inflation, and consumer confidence are some of the most important numbers that the Fed watches.
The only data from the United Kingdom will be on public-sector spending. Economists expect that the government borrowed 22.9 billion pounds in March, higher than the previous 15.8 billion pounds.
The British pound has continued rising in the past few months. It has jumped by more than 20% from the lowest level in 2022, making it one of the best-performing currencies this year. The pair managed to move slightly above the important resistance level at 1.2467, the highest point on April 19.
It rose above the 25-period moving average while the MACD has moved above the neutral point. The Money Flow Index (MFI) has moved to the neutral point. Therefore, the pair will likely continue rising as buyers target the year-to-date high of 1.2540. A move above this level will push it to the next key level at 1.2600.