[ad_1]
The Federal Reserve published encouraging minutes on Wednesday. These minutes showed that officials were wary about the need to continue hiking interest rates.
Forex Brokers We Recommend in Your Region
See full brokers list 
- Buy the GBP/USD pair and set a take-profit at 1.2850.
- Add a stop-loss at 1.2670.
- Timeline: 1-2 days.
- Set a sell-stop at 1.2700 and a take-profit at 1.2600.
- Add a stop-loss at 1.2800.
The GBP/USD exchange rate was unchanged after the UK published the latest UK inflation data and FOMC minutes. The pair was trading at 1.2741, higher than this week’s low of 1.2620.
The UK published mixed consumer inflation numbers on Wednesday. Data by the Office of National Statistics (ONS) showed that the headline consumer inflation dropped by 0.4% in July translating to a YoY increase of 6.8%. On the other hand, core inflation rose from 0.2% to 0.3% on a MoM basis and by 6.9% on a YoY basis.
The country’s inflation drop was supported by lower gas, electricity, and food prices. Still, UK’s inflation is significantly above the Bank of England’s target of 2.0%. Also, with wage growth accelerating, there is a likelihood that inflation will remain stubbornly high, putting pressure on the Bank of England to accelerate its rate hikes.
The GBP/USD pair was also muted after the US published mixed data. Housing starts rose by 3.9% to 1.45 million while building permits rose by 0.1% to 1.44 million. These numbers mean that the housing sector is still doing well even as mortgage rates rise. Additional data revealed that industrial and manufacturing production rose by 1% and 0.5% in July.
The Federal Reserve published encouraging minutes on Wednesday. These minutes showed that officials were wary about the need to continue hiking interest rates. They were concerned about overtightening, signaling that officials will likely pause going forward.
The Fed has succeeded in bringing inflation down without causing a hard landing. Analysts now believe that the headline CPI will hit the 2% target by December, pushing the Fed to start cutting rates in Q1 or Q2 of next year.
The GBP/USD pair formed a double-bottom pattern of 1.2620 on August 3rd and 14th. On the three-hour chart, it has remained in a narrow range. The pair moved below the descending trendline and slightly above the 25-period and 50-period moving averages.
It is stuck at the Woodie pivot point at 1.2717. Therefore, the outlook for the pair is neutral with a bullish bias. A bullish breakout will be confirmed if the pair flips the resistance at 1.2767 (this week’s high) into support. If this happens, the next level to watch will be 1.2800.
Ready to trade our Forex daily forecast? We’ve shortlisted the best regulated forex brokers UK in the industry for you.
[ad_2]