(MENAFN- Daily Forex) Bearish View
Sell the GBP/USD pair and set a take-profit at 1.2500. Add a stop-loss at 1.2725. Timeline: 1-2 days.
Bullish View
Buy the GBP/USD pair and set a take-profit at 1.2700. Add a stop-loss at 1.2500.
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The GBP/USD
exchange rate has been in a steep sell-off since September 30th, falling from a high of 1.3428 to 1.2600, its lowest level since July 2. This sell-off accelerated as the US dollar index (DXY) surged from the year-to-date low of 100 to $107.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money UK Economic Data Ahead
The GBP/USD pair will be in the spotlight this week as the market reflects on key economic numbers from the UK.
The Office of National Statistics (ONS) will publish the latest consumer inflation data on Wednesday this week. Economists expect the report to show that the headline Consumer Price Index (CPI) rose from 1.7% in September to 2.2% in October, moving above the Bank of England (BoE) target of 2.0%.
Core inflation, which excludes the volatile food and energy products, is expected to come in at 3.1%, a slight drop from the previous 3.2%.
The ONS will also release the headline and core retail sales data on Friday. Economists see the data to show that the headline sales dropped by 0.3% in October after growing by 0.3% in the previous month.
These numbers will likely have an impact on the Bank of England (BoE), which has delivered two interest rate cuts this year. Unlike most banks, the BoE has hinted that it will embrace a gradual strategy when cutting interest rates.
The GBP/USD pair has also continued its sell-off as the US dollar index has soared because of the recent Donald Trump victory/USD technical Analysis
The GBP/USD pair has been in a strong sell-off in the past few weeks. It recently dropped below the important support at 1.3000, its lowest level on September 11. It has also dropped in the past six consecutive days, and is hovering at its lowest swing on July 2nd.
EURUSD Chart by TradingView
The pair has dropped below the 50-day and 200-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) and the MACD indicators have all pointed downwards. The Average Directional Index (ADX) has jumped to 40.
Therefore, the pair will likely continue falling as sellers target the next key support at 1.2500. The stop-loss of this target will be at 1.2750. A move above that point will signal more gains as bulls target the key point at 1.2900.
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