GBP/USD Forex Signal 28/08: Extremely Bullish (Chart)

(MENAFN- Daily Forex) Bullish outlook

• But the GBP/USD pair and set a take-profit at 1.3600.
• Add a stop-loss at 1.3400.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3400.
• Add a stop-loss at 1.3600.

The GBP/USD exchange rate continued to consolidate as focus shifted to the upcoming US GDP and PCE inflation report and its impact on the Federal Reserve. It rose to 1.3495, up by over 2.7% from its lowest level this month GDP and PCE Inflation Data Ahead

The GBP/USD exchange rate rose as investors focus on the potential divergence between the Federal Reserve and the Bank of England (BOE) and the upcoming economic data from the US.

In a statement this week, Catherine Mann, a senior BoE official, noted that she saw a case for maintaining interest rates unchanged after the recent strong inflation data. A report by the Office of National Statistics showed that the headline and core consumer price index rose to over 3.6% in July.

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On the other hand, Jerome Powell and several other Federal Reserve officials have hinted that they will be open to cut interest rates in the upcoming meeting in September.

The GBP/USD exchange rate will react to the upcoming US GDP data, which will come out later today. This second estimate is expected to show that the economy rebounded in the third quarter after it contracted in the first quarter as companies boosted their imports before Donald Trump's tariffs.

The GBP/USD pair will also be impacted by Friday's Personal Consumption Expenditure (PCE) inflation data, which will provide more information on changes in prices in rural and urban areas in the US.

While important, the data's impact will be limited as Fed officials have hinted that they are focusing on the labor market. As such, next week's jobs numbers will be the most important as they will come less than two weeks before the Federal Reserve meets and delivers its interest rate decision.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The GBP/USD exchange rate has fluctuated this week following Jerome Powell's statement on interest rates last week. It was trading at 1.3500, slightly above the Ichimoku cloud indicator.

The 12-hour chart shows that it has formed an inverse head-and-shoulders pattern and is now slightly below the neckline. It has moved above the 50-period moving average.

Therefore, the pair will likely continue rising as traders target the neckline at 1.3590 followed by the year-to-date high of 1.3785. A drop below the right shoulder at 1.3400 will invalidate the bullish outlook.

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