(
MENAFN- Daily Forex) Bearish View
Sell the GBP/USD pair and set a take-profit at 1.2400. Add a stop-loss at 1.2600. Timeline: 1-2 days.
Bullish View
Buy the GBP/USD pair and set a take-profit at 1.2600. Add a stop-loss at 1.2400.
The GBP/USD pair rallied this week, continuing a trend that started on Thursday when it bottomed at a multi-month low of 1.2353. It has rebounded as the US dollar rally cooled ahead of the upcoming US jobs data and Federal Reserve minutes.
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The GBP/USD pair rose as the greenback softened overall. The closely watched US dollar index fell by over 60 basis points, paring back some of the recent gains.
This performance happened after the first statement by a Fed official of the year. In a statement, Lisa Cook, who sits on the FOMC, said that she supported the Fed's hawkish twist as inflation was still a big challenge while the labor market was strong.
The statement came ahead of a busy market week. On Wednesday, the Federal Reserve will publish the minutes of its last meeting. As always, these minutes will provide more information about the year's last meeting.
In that meeting, the Fed cut interest rates by 0.25% and maintained a hawkish tone. It reduced the expected interest rate cuts in 2025 to 2 from the previous four. Officials believe inflation may remain higher for longer, especially if Donald Trump's policies like deportations and tariffs work.
This week's other important GBP/USD news will be the upcoming US jobs numbers. The Bureau of Labor Statistics (BLS) will release the JOLTS job openings numbers. Economists expect the data to show vacancies rose to 7.7 million in November.
ADP will then release the private payroll numbers on Wednesday, while the Bureau of Labor Statistics (BLS) will release the official report on Friday.
The only UK data to watch this week will be Tuesday's house price index, which will provide more information about the housing sector/USD Technical Analysis
The GBP/USD exchange rate bottomed at 1.2355 last week and then rebounded to 1.2510. Its lowest point last week coincided with the 78.6% Fibonacci Retracement level.
It has now rebounded and moved above the key support at 1.2488, the lowest swing on November 22. The pair remains below all moving averages, indicating that the ongoing rebound may be a dead cat bounce.
It has also formed a break and retest pattern, a popular continuation sign. Therefore, the pair may resume the downtrend in the next few days and retest last week's low of 1.2355.
EURUSD Chart by TradingView
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