GBP/USD Signal Today - 21/10: Path Of Least Down (Chart)


(MENAFN- Daily Forex) Bearish view

  • Sell the GBP/USD pair and set a take-profit at 1.2895.
  • Add a stop-loss at 1.3125.
  • Timeline: 1-2 days.
Bullish view
  • Set a buy-stop at 1.3055 and a take-profit at 1.3150.
  • Add a stop-loss at 1.2895.

The GBP/USD pair stabilized after a series of mixed economic numbers from the UK and the United States. It bottomed at 1.2983 on Thursday, and was trading at 1.3050 on Monday morning.

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The GBP/USD pair remained under pressure after the UK's Office of National Statistics (ONS) published mixed economic data.

Its report on Wednesday showed that the headline Consumer Price Index (CPI) retreated from 2.2% in August to 1.7% in September. Core inflation, which excludes the volatile food and energy products, dropped from 3.6% to 3.2%. The producer price index (PPI) dropped from minus 1.0% to minus 2.3% during the month.

Another report showed that retail sales held steady in September. The headline sales rose from 2.3% in August to 3.9% in September. Core sales also continued rising, reaching 4% in September, higher than the median estimate of 3.2%.

These are positive numbers for the Bank of England since inflation has moved to its 2% target and the economy seems to be doing well. Data released earlier this month showed that the manufacturing and services PMIs remained above 50 in September.

Still, the Bank of England will likely restart cutting interest rates in its November 7 meeting. Data by Bloomberg shows that the 2-year gilt yield rose to 4.0%, while the 10-year rose to 4.05%.

The GBP/USD pair will likely have a muted week since there will be no major economic data from the US and the UK.

The key data to watch will be the flash UK and US manufacturing PMI data scheduled on Thursday. These numbers will provide more color on the state of the US and UK economies and what to expect/USD technical analysis

EURUSD Chart by TradingView

The GBP/USD pair has been in a downward trend in the past few days. It has retreated from the year-to-date high of 1.3431, its highest swing in September.

The pair has moved below the 23.6% Fibonacci Retracement point at 1.3100. Most notably, the 25-day and 50-day moving averages are about to form a bearish crossover pattern.

The two lines of the MACD indicator have moved below the zero line. The pair will likely continue falling with the next reference point to watch being at 1.2895, the 38.2% Fibonacci Retracement point.

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Daily Forex

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