(MENAFN- Daily Forex) Bullish view
Buy the GBP/USD pair and set a take-profit at 1.2720. Add a stop-loss at 1.2645. Timeline: 1-2 days.
Bearish view
Set a sell-stop at 1.2675 and a take-profit at 1.2600. Add a stop-loss at 1.2725.
The GBP/USD remained in a tight range after some encouraging UK inflation data followed by weak US numbers. The pair was trading at 1.2685 on Wednesday, a few points above this week's low of 2660 GDP data ahead
The UK published another good inflation report on Tuesday. According to the Kantar, grocery inflation dropped to its lowest point in two years. The figure came in at 5.3% in February, down by 1.5% from January.
A separate report by the British Retail Consortium (BRC) also confirmed that the prices continued falling. These numbers came a week after Ofgem announced that energy prices will drop in the coming months. The agency reduced the April price cap in April as wholesale gas and electricity prices fell.
These numbers are encouraging for the Bank of England (BoE), which has come under intense pressure recently. The most recent reports showed that the headline Consumer Price Index (CPI) rose to 4.0% in the 12 months to December. It remained twice above the bank's inflation target.
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The GBP/USD pair also consolidated after the weak US economic numbers. According to the Conference Board, the country's consumer confidence dropped sharply in February. The confidence retreated to 106.6 in February.
Further, the country's house price index (HPI) rose by 0.1% while durable and core durable goods orders crashed by 6.1% and 0.3%, respectively. These numbers were much weaker than the median estimate of -4.9% and 0.2%, respectively.
Therefore, these reports raise the possibility that the US will face a hard landing this year. In a statement, David Solomon, the head of Goldman Sachs, warned that while the world was set for a soft landing, there was higher levels of uncertainty.
The next important data to watch will be the US GDP, crude oil inventories, and the weekly mortgage numbers. However, their impact of these numbers on the pair will be limited/USD technical analysis
The GBP/USD pair has held steady in the past few days. It has rallied from this month's low of 1.2518 to 1.2687. The pair has formed an ascending channel and remained above the 50-period moving average. It is at the middle point of this channel.
The Percentage Price Oscillator (PPO) and the MACD indicators have remained above the neutral point. It has found some resistance at 1.2692, its highest swing on February 13th. Therefore, the pair will likely continue rising as buyers target the key resistance at 1.2720, the upper side of the channel.
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