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The GBP/USD price continued rising this week after bottoming at 1.2032 on October 4th.
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- Sell the GBP/USD pair and set a take-profit at 1.2200.
- Add a stop-loss at 1.2400.
- Timeline: 1-2 days.
- Set a buy-stop at 1.2330 and a take-profit at 1.2400.
- Add a stop-loss at 1.2250.
The GBP/USD rally continued on Thursday morning ahead of the closely watched UK GDP and US consumer price index (CPI) data. It rallied to a multi-week high of 1.2336, higher than this month’s low of 1.2045.
The British pound’s rebound continued ahead of the closely-watched UK economic data scheduled for Thursday morning. Economists expect the data to reveal that the economy expanded by 0.2% in August after contracting by 0.2% in July. They also see it growing by 0.5% on a YoY basis.
The Office of National Statistics (ONS) will also publish other crucial data like the manufacturing and industrial production figures. It will also release the latest trade numbers.
These numbers will come two days after the International Monetary Fund (IMF) warned that the UK will be the worst-performing country in the G7. It expects the economy to go through stagflation for a few years.
The GBP/USD pair also rose after the latest Federal Reserve minutes. These minutes revealed that most officials expect the bank to maintain a restrictive policy for a few months. Some officials also believe that the Fed should deliver another 0.25% hike later this year.
Looking ahead, the US will publish September’s CPI data. Economists polled by Reuters believe that the headline inflation dropped slightly from 3.7% in August to 3.6% in August. Core inflation is also expected to drop to 4.1%.
These numbers will come a few days after the US published strong jobs numbers. The data revealed that the economy created more than 330k jobs in September while the unemployment rate rose to 3.8%.
The GBP/USD price continued rising this week after bottoming at 1.2032 on October 4th. It has flipped the important resistance at 1.2272 (September 29th high) into support. The pair has also risen above the 50-period moving average while the Relative Strength Index (RSI) has formed a rising wedge pattern.
Further, the GBP/USD pair has also formed a rising wedge, which is a sign of a bearish reversal. Therefore, with the wedge nearing its confluence level, there is a likelihood that the pair will have a bearish breakout. This breakout will likely happen before or after the US consumer inflation data.
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