(MENAFN- Daily Forex) Bearish view
Sell the GBP/USD pair and set a take-profit at 1.3270. Add a stop-loss at 1.3500. Timeline: 1-3 days.
Bullish view
Buy the GBP/USD pair and set a take-profit at 1.3500. Add a stop-loss at 1.3268.
The GBP/USD pair continued its strong surge this week as the US dollar
index (DXY) retreated to $100.50. It has risen by over 5% this year, making sterling one of the best-performing currencies. It jumped to a high of 1.3400, up by 9% from its lowest level this year rally continues
The GBP/USD pair continued soaring after the Federal Reserve and the Bank of England (BoE) diverged.
In its interest rate decision, the Fed slashed interest rates by 0.50% last week and hinted that it will continue doing that in the coming months.
The case for more cuts emerged on Tuesday after the Conference Board published the latest consumer confidence report.
In a report, the organization said that consumer confidence dropped to 98.3 in September, the biggest drop in over 3 years. Most consumers are concerned about the labor market now that the unemployment rate has risen to 4.2%.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money
A weak consumer confidence report means that spending could retreat, affecting the entire economy. This data came a day after S&P Global said that manufacturing PMI remained below 50 in September.
The Bank of England, on the other hand, left interest rates unchanged at 5.0% and committed that it will be cautious when it comes to cutting interest rates. It is concerned that faster cuts will lead to more inflation in the coming months.
There will be no major economic data from the US on Wednesday. The key data to watch will be the US new home sales and building permits numbers. Economists expect the data to show that new home sales fell to 693k in August while building permits rose to 1.47 million.
Fed's Adriana Kugler, a member of the board, will talk. Like other Fed officials who have talked this week, she will likely make the case for more cuts/USD technical analysis
The GBP/USD pair continued its strong rally as traders continued to reflect on last week's BoE and Fed decisions. It crossed the important resistance point at 1.3270, its previous highest point this year.
The pair has held steady above the 50-day Exponential Moving Average (EMA) and has invalidated the double-top chart pattern.
Also, the Average Directional Index (ADX) has risen to 35 while the two lines of the MACD have formed a bullish crossover. The Relative Strength Index has also risen and is approaching the overbought leve.
Therefore, while the pair has more upside, a retreat to the support at 1.3268 cannot be ruled out.
Ready to trade our daily Forex signal ? Check out the best forex brokers in the UK worth using.
MENAFN25092024000131011023ID1108715409
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.