(MENAFN- Daily Forex) Bearish view
Sell the GBP/USD pair and set a take-profit at 1.2650. Add a stop-loss at 1.2825. Timeline: 1-2 days.
Bullish view
Set a buy-stop at 1.2750 and a take-profit at 1.2850. Add a stop-loss at 1.2650.
The GBP/USD
exchange rate was flat on Thursday morning as it reacted mildly to the US consumer inflation data. The pair was trading at 1.2750, where it has been stuck at throughout this week as the focus now shifts to the upcoming UK
GDP data and next week's interest rate decisions and BoE decisions ahead
The GBP/USD pair has remained in a tight range this week as traders waited for the US inflation data. According to the Bureau of Labor Statistics (BLS), the headline and core consumer price index came in at 2.7% and 3.3%, respectively. These numbers were in line with what analysts were expecting and are a sign that inflation is still a big challenge in the US.
The data came almost a week after the US published soft-ish jobs data. According to the BLS, the economy added over 200k jobs in November, a positive reversal after it added just 30k in October. However, the labor participation rate dropped, while the unemployment rate rose to 4.2%.
The next key data to watch will be the US producer price index (PPI), which will come out on Thursday. Economists expect the data to show that the headline PPI rose to 2.4% in November, while the core PPI rose to 3.2%. While the PPI is an important economic data it often does not have a major impact on the US dollar.
The next GBP/USD news will come out on Friday when the Office of National Statistics (ONS) will release the GDP, industrial production, and manufacturing production report. Economists expect the data to show that the British economy rose by 0.1% in October after contracting by 0.1% in September.
All these numbers are coming ahead of the upcoming Federal Reserve and Bank of England decisions.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money GBP/USD technical analysis
The GBP/USD exchange rate has been in a slow upward trend in the past few days. It has moved from this month's low of 1.2500 to a high of 1.2810. Along the way, the pair has formed a rising wedge chart pattern, a popular bearish sign.
The GBP/USD pair is also about to form a death cross pattern as the 50-day and 200-day moving averages cross each other. It has also remained below the key resistance level at 1.2898, its highest level in March.
Therefore, with the rising wedge nearing the confluence level, the pair will likely have a bearish breakout and move to 1.2650.
EURUSD Chart by TradingView
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