(
MENAFN- Daily Forex) Bullish View
Buy the GBP/USD pair and set a take-profit at 1.2450. Add a stop-loss at 1.2200. Timeline: 1-2 days.
Bearish View
Sell the GBP/USD pair and set a take-profit at 1.2200. Add a stop-loss at 1.2450.
The GBP/USD
exchange rate rebounded as the
market assessed the main executive orders that Donald
trump signed in his first day as the US president. The pair rose to a high of 1.2338, up from this month's low of 1.2100.
The pair rose after the new US president's executive orders avoided tariffs from Europe and countries like Canada and Mexico. In a statement on Tuesday, however, he said that his threat to impose tariffs on the two neighbors was still on the table. He has accused the two of facilitating illegal immigration.
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The GBP/USD pair rose after a mixed labor report from the UK. According to the Office of National Statistics (ONS), the unemployment rate rose from 4.3% in October to 4.5% in November. On the positive side, the economy added 35k jobs in three months to November, while average earnings jumped.
The key risk for the British economy is that growth has stalled as evidenced by the weak performance of retail sales in December. The gilt market has sold off, meaning that the market was struggling to absorb the country's borrowing needs.
Recent data shows that the UK is now paying about £100 billion a year to service its debt, which could lead to a death spiral. Such a spiral happens when the country has to borrow more money to pay its debt.
There will be no scheduled economic data scheduled on Wednesday. As such, traders will focus on the policies proposal by the Trump administration and their impact on key assets. The market is also waiting for next week's Federal Reserve and Bank of England's interest rate decisions/USD technical analysis
The GBP/USD pair dropped and bottomed at 1.2100 on January 13 as the US dollar index jumped. It has now rebounded to 1.2335, its highest point on January 9.
Sterling crossed the important resistance point at 1.2300, its lowest swing on April 2024. Also, the two lines of the MACD indicator have formed a bullish crossover pattern, while the Relative Strength Index has tilted upward.
The pair has moved close to the 25-day moving average at 1.2400. Therefore, after falling sharply before Trump's inauguration, the pair may now continue rising as investors buy the dip. The initial target will be the 25-day moving average, followed by the 50 EMA point at 1.2545.
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