GBP/USD Forex Signal 11/08: Bullish Outlook (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3600.
• Add a stop-loss at 1.3350.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3350.
• Add a stop-loss at 1.3600.

The GBP/USD pair continued its strong rebound as investors reacted to the Bank of England (BoE) interest rate decision. It has risen for six consecutive days and is hovering at its highest point since July 25 Jumps After BoE Interest Rate Cut

The GBP/USD exchange rate continued its strong rally after the BoE delivered its monetary policy decision. It decided to cut interest rates by 0.25% as most analysts were expecting.

The vote, however, was in a fine margin as some officials voted to leave rates unchanged because of their concerns about inflation. Recent data showed that the headline consumer inflation rose to 3.6% in June, much higher than the bank's target of 2.0%.

On the other hand, there are concerns about the economic growth, with the recent data showed that the labor market cooled. A report expected on Tuesday is expected to show that the unemployment rate remained unchanged at 4.7% as the number of payrolls dropped by 41,000.

As such, it is clear that the UK is experiencing stagflation, where a period of high inflation rate accompanies slow economic growth. The most recent data showed that the GDP grew by just 0.1% in May.

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A report coming out on Thursday is expected to show that the economy expanded by 0.1% in Q2, a deceleration from 0.7% in the previous quarter.

The GBP/USD exchange rate rose as some Fed officials like Christopher Waller, Susan Collins, and Neel Kashkari supported a potential cut in September after the recent jobs numbers. The data revealed that the labor market was deteriorating at a faster pace than expected.

The next crucial data that will impact the pair will be the upcoming US Consumer Price Index (CPI) data. A hotter-than-expected jobs report will complicate the Fed cut situation.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The GBP/USD pair has rebounded in the past few days after forming a double-bottom pattern at 1.3140. A double-bottom is one of the most common bullish reversal patterns in technical analysis.

The pair has moved above the important resistance level at 1.3431, its highest level in September last year. It has moved above the 50-day moving average and the strong pivot reverse point of the Murrey Math Lines.

Therefore, the pair will likely continue rising as bulls target the key resistance at 1.3600, a few points above the weak, stop & reverse point.

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