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MENAFN- Daily Forex) Bullish view
- Buy the GBP/USD pair and set a take-profit at 1.3100.
- Add a stop-loss at 1.2850.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.2925 and a take profit at 1.2850.
- Add a stop-loss at 1.3100.
The GBP/USD pair rose slightly after the US published weak economic numbers on Tuesday. It rose from a low of 1.2887 on Monday to a high of 1.2945, as focus shifted to the upcoming UK consumer and producer inflation data inflation data ahead
The GBP/USD pair rose after a report by the Conference Board showed that consumer confidence plunged in March. It moved from 100.1 in February to 92.9 in March, missing the average analyst estimate of 94.2.
Consumer and business confidence has dropped sharply in the past few months as concerns about Donald Trump's tariffs continue. They are worried that these tariffs will have a major impact on inflation. Historically, tariffs are usually passed on to consumers, which explains why they are seen as taxes.
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Higher tariffs imply that the Federal Reserve will maintain their hawkish tone this year. In a statement on Monday, Raphael Bostic, a top Fed official, hinted that the bank would deliver just one rate cut this year.
The GBP/USD pair rose slightly after the US released the latest housing data. This report showed that the house price index remained unchanged at 4.8% in January. Another data revealed that the new home sales figure dropped from 664k in January to 676k in February.
The next key GBP/USD pair news to watch will be the upcoming consumer inflation data. Economists expect the report to show that the headline CPI dropped from 3.0% in January to 2.9% in February, while the core CPI slipped from 3.7% to 3.6%.
A sign that UK inflation is easing will be a good thing as it will point to a potential rate cut in the next meeting. The Bank of England left interest rates unchanged in its meeting last week.
EURUSD Chart by TradingViewGBP/USD technical analysis
The GBP/USD pair has made a strong breakout in the past few days. It was trading at 1.2950, a few points above the 61.8% Fibonacci Retracement level.
The pair has remained above the 50-day moving average. It is also between the Bollinger Bands indicator's middle and upper lines, while popular oscillators like the RSI and the MACD have all pointed upward.
The pair is also trading at the strong pivot reverse point at 1.2940. Therefore, the GBP/USD exchange rate will likely continue rising as bulls target the year-to-date high of 1.3016. A move above that level will point to more gains to 1.3100.
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