(
MENAFN- Daily Forex) Bullish View
Buy the GBP/USD pair and set a take-profit at 1.2650. Add a stop-loss at 1.2450. Timeline: 1-2 days.
Bearish View
Set a sell-stop at 1.2510 and a take-profit at 1.2450. Add a stop-loss at 1.2650.
The GBP/USD pair was flat after the
conference Board published the latest US consumer confidence report and after the latest UK
GDP data. The cable was trading at 1.2530 ahead of the Christmas holiday.
Top
Forex Brokers1 Get Started 74% of retail CFD accounts lose money US Consumer Confidence and UK GDP Data
The GBP/USD exchange rate has been in a steady downward trend amid an ongoing divergence between the UK and the United States.
Data released on Monday showed that the British economy stagnated in the third quarter. It was unchanged from the second quarter and expanded by 0.9% annually. This growth was lower than the median estimate of 0.1% and 1.0%.
These numbers came a few days after the Bank of England left interest rates unchanged as its concerns about inflation continued.
The US, on the other hand, has continued to do well as it avoided a recession. Its economy expanded by 3.1% in Q3 and is on track to grow by 2.5% YoY this year. If correct, the economy has grown by over 12% since the Covid-19 downturn.
The GBP/USD pair reacted to the consumer confidence report. According to the Conference Board, consumer confidence dropped from 112.8 in November to 104.7 in December, missing the median estimate of 112.9.
More US data showed that durable goods orders dropped from 0.8% in October to minus 1.1% in November.
Therefore, the GBP/USD pair reacted mildly to these reports because the Fed and the BoE have already delivered their final decisions of the year. The Fed slashed interest rates by 0.25% and hinted it would deliver two more cuts next year. It is more concerned about Trump's rising inflation as he prepares to impose more tariffs on its top trading partners like Canada and Mexico/USD Technical Analysis
The GBP/USD exchange rate has dropped sharply because of the US and UK GDP divergence and the strong US dollar. It has slipped from the year-to-date high of 1.3433 to a low of 1.2485, where it formed a double-bottom pattern.
The pair has crashed below the 61.8% Fibonacci Retracement level and the 50-day moving average. It also hovers slightly above the first support of the Woodie pivot point.
Therefore, the GBP/USD pair may bounce back because of the double-bottom pattern. Such a move will push it to the next psychological point at 1.2650.
EURUSD Chart by TradingView
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