(MENAFN- Daily Forex) Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3300.
• Add a stop-loss at 1.3550.
• Timeline: 1-2 days.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3550.
• Add a stop-loss at 1.3300.

The GBP/USD exchange rate held steady after the UK published the latest GDP report and as traders waited for the upcoming inflation report. It rose to a high of 1.3425, up from the year-to-date low of 3253 Inflation and Retail Sales Data Ahead

The GBP/USD pair rose slightly after a report by the Office of National Statistics (ONS) showed that the country's economy eked a small growth as factories recovered. It expanded by 0.1% in August, a notable improvement after it contracted by 0.1% in the previous month. This increase was in line with what analysts were expecting.

The report means that the UK will publish an encouraging third-quarter GDP report. However, these numbers confirm that the UK economy is growing at a slow pace amid a period of higher interest rates and taxes. Deutsche Bank and HSBC analysts expect the report to show that the economy expanded by 0.20% in Q3.

Rachel Reeves, the Chancellor of the Exchequer, has hinted that she will hike taxes to fill the £50 billion gap in her budget. The risk, however, is that higher taxes will push more wealthy people out of the country.

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The next key GBP/USD news will come out on Wednesday when the country publishes the latest consumer and producer inflation report. Economists expect the report to show that the headline CPI rose from 3.8% in August to 4% in September. Core inflation is expected to increase from 3.6% to 3.7% as it moves further away from the BoE's inflation target.

The GBP/USD exchange rate will also react to the upcoming US inflation data on Friday. A hotter-than-expected report will complicate the Federal Reserve interest rate outlook by making it hard to cut interest rates.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The daily timeframe chart shows that the GBP/USD exchange rate formed a double-top pattern at 1.3731 and a neckline at 1.3140, its lowest level in July and the 38.2% Fibonacci Retracement point.

It is consolidating at the 50-day and 100-day Exponential Moving Averages (EMA). At the same time, the Relative Strength Index (RSI) and the Average True Range (ATR) indicators have formed a bearish divergence pattern.

The pair has also formed a small head-and-shoulders pattern, which is a common bearish reversal pattern. Therefore, it will likely have a strong bearish breakout potentially to the key support at 1.3141.

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