GBP/USD Forex Signal 29/09: Double-Top Pattern Forms (Chart)

(MENAFN- Daily Forex) Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3300.
• Add a stop-loss at 1.3500.
• Timeline: 1-2 days.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3500.
• Add a stop-loss at 1.3300.

The GBP/USD exchange rate pulled back from the September high of 1.3725 to the current 1.3400. This retreat happened as the US Dollar Index (DXY) jumped from $96.32 to $98 NFP Data and the Federal Reserve

The GBP/USD exchange rate pulled back after the Federal Reserve delivered its first interest rate cut of the year almost two weeks ago. This retreat happened as some Federal Reserve officials warned that aggressive interest rate cuts would fuel inflation.

These officials warned that inflation was still a major concern for the economy as it has remained above the target in the last four years. A report released on Friday showed that the Personal Consumption Expenditure (PCE) inflation continued rising in August, reaching a high of 2.7%.

Also, concerns of more cuts increased after the US published the latest GDP numbers, which showed that the economy expanded by 3.8% in the second quarter, higher than what most analysts were expecting.

The GBP/USD pair will have some important catalysts this week, with the most important being the upcoming US nonfarm payrolls data. These numbers are important because they will influence the Federal Reserve interest rate decision in October.

A weak jobs report will confirm that the labor market is still deteriorating, which will push the Federal Reserve to continue with its interest rate cuts.

The other important catalysts for the pair will be the upcoming US consumer confidence report by the Conference Board. In most cases, this report tends to have an impact on the Fed because of the impact of the economy.

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The other notable numbers will be the upcoming US and UK manufacturing and services PMI numbers, which will provide more information about the health of the two economies.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The daily timeframe chart shows that the GBP/USD exchange rate has pulled back in the past few days, moving from a high of 1.3725 on September 17 to the current 1.3400. It has moved below the 50-day and 25-day Exponential Moving Averages.

Most importantly, the pair has formed a double-top pattern at 1.3725 and a neckline at 1.3141, its lowest level on August 1.

Therefore, the most likely scenario is where the pair has a strong bearish breakout, potentially to the neckline at 1.3141. A move above the resistance at 1.3500 will invalidate the bearish outlook.

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