(MENAFN- Daily Forex) Bearish View
Sell the GBP/USD pair and set a take-profit at 1.2850. Add a stop-loss at 1.3050. Timeline: 1-2 days.
Bullish View
Set a buy-stop at 1.3000 and a take-profit at 1.3050. Add a stop-loss at 1.2900.
The GBP/USD
exchange rate stabilized a bit ahead of the important UK budget and important US economic data. It was trading at 1.2975, much lower than the year-to-date high of 1.3427. It is also hovering near its lowest level since August 19.
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Forex Brokers1 Get Started 74% of retail CFD accounts lose money UK Autumn Budget Ahead
The GBP/USD pair remained under pressure as Rachel Reeves prepares to deliver the first Labour Party budget in over a decade.
In a statement on Monday, Keir Starmer, the head of the Treasury warned that the budget would be painful and that it will have difficult decisions.
A key issue will be how to finance a £22 billion hole in the budget while delivering more funds for investments. One of the approaches under consideration will be how the UK calculates its debts. A change to include the government's assets will give her room to borrow, while cutting some taxes.
The key GBP/USD news to watch on Tuesday will be the September lending data. Economists expect the numbers to show that the net lending to individuals slipped slightly to £4.1 billion, while mortgage approvals rose to 65,000.
The other data will come from the United States, where the Conference Board will release the latest consumer confidence numbers. Economists expect the data to show that confidence rose slightly in October.
The US will also publish the latest house price index (HPI) and JOLTS job vacancies numbers later today.
The GBP/USD pair is also reacting to the upcoming US election, which will happen next week. In a close election like this, the US dollar will likely rise as investors move to its safe haven. The pair also reacted to the easing tensions in the Middle East, where Israel's response to Iran's missile attack was milder than expected/USD Technical Analysis
The daily chart shows that the GBP/USD exchange pair has been in a downward trend in the past few days after peaking at 1.3427, its highest level in September.
EURUSD Chart by TradingView
It has moved below the 23.6% Fibonacci Retracement point at 1.3100. Also, the 50-day and 26-day Exponential Moving Averages (EMA) have made a bearish crossover, pointing to more downside. It has also slipped below the support at 1.300, its lowest level on September 11.
The MACD indicator has moved below the zero line. Therefore, the pair will likely continue falling as sellers target the key support at 1.2850.
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