(MENAFN- Daily Forex) Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3350.
• Add a stop-loss at 1.3585.
• Timeline: 1-2 days.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3585.
• Set a take-profit at 1.3350.

The GBP/USD exchange rate pulled back for three consecutive days, even as the UK published strong consumer inflation data. It retreated to a low of 1.3462, down from last week's high of 1.3583 as focus now shifts to the upcoming Jackson Hole Symposium speech Inflation Data and Jackson Hole Symposium

The GBP/USD pair retreated after the Office of National Statistics (ONS) showed that UK inflation continued rising. The headline CPI rose from 3.6% in June to 3.8% in July, higher than the median estimate of 3.7%.

Similarly, the core CPI, which excludes the volatile food and energy prices, rose from 3.7% to 3.8%. The two numbers have moved further away from the BoE's target of 2.0%.

These numbers also confirmed that the UK was in a stagflation, a period characterized by high inflation and slow economic growth. As a result, analysts expect the bank will maintain its interest rates unchanged for the rest of the year.

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The GBP/USD pair retreated because of the ongoing US dollar surge. Data shows that the dollar index (DXY) rose to $98.20 from this month's low of $97.67.

The dollar jumped as market participants maintained their risk-off sentiment. For example, the Nasdaq 100 Index fell by 243 points, while the Dow Jones declined by 90 points.

The GBP/USD pair also retreated after the Federal Reserve published minutes of the last monetary policy meeting. These minutes showed that most officials saw inflation as a bigger risk, fears that were confirmed after the US released strong consumer and inflation data last week.

The next important catalyst for the pair will be on Friday when Jerome Powell talks at the Jackson Hole Symposium in Wyoming. He will likely react to the recent inflation data and hint on what to expect in the next meeting

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The 12-hour chart shows that the GBP/USD exchange rate has pulled back in the past few days. This pullback happened after it peaked at 1.3583, its highest swing on July 23rd and August 14. It has formed the highly bearish double-top chart pattern.

The two lines of the MACD have formed a bearish crossover pattern and are pointing downwards, while the Relative Strength Index has dropped and crossed the neutral point at 50.

Therefore, the GBP/USD pair will likely have a bearish breakdown, with the next key level to watch being at 1.3350. A move above the resistance level at 1.3585 will invalidate the bearish outlook.

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