(MENAFN- Daily Forex) Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3000.
• Add a stop-loss at 1.3250.
• Timeline: 1-2 days.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3250.
• Add a stop-loss at 1.3000.

The GBP/USD exchange rate was flat on Wednesday morning as forex traders waited for the upcoming UK consumer and producer inflation report. It was trading at 1.3150, a range it has remained at in the past few days Inflation Data Ahead

The GBP/USD pair moved sideways on Monday as traders waited for the upcoming UK consumer inflation report, which will provide more information on whether prices are rising or not.

Economists polled by Reuters and Bloomberg expect the upcoming report to show that the headline Consumer Price Index (CPI) improved in October, but remained substantially higher than the 2% target.

The consensus is that the headline CPI rose softened from 3.8% in September to 3.6% in October. However, on a monthly basis, these analysts expect the figure to move from 0% to 0.4%.

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Core inflation, which excludes the volatile food and energy prices, is expected to move from 3.5% to 3.4%. The ONS will also publish the latest retail and producer inflation data.

The Bank of England is facing a major challenge now that data shows the economy has moved into a stagflation period, which is characterized by high inflation and slow economic growth.

The GBP/USD pair will next react to the upcoming Federal Reserve minutes and the US jobs numbers, which will come out on Thursday. These minutes will come out as odds on whether the bank will cut interest rates in the next meeting fall.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The daily timeframe chart shows that the GBP/USD exchange rate remained unchanged on Wednesday. If was stuck at 1.3165, an important level that aligned with the 38.2% Fibonacci Retracement level.

The pair remains below the 200-day Exponential Moving Average (EMA), a sign that bears remain in control. It has also formed a bearish flag pattern, a popular bearish continuation sign.

The Relative Strength Index (RSI) has pointed downwards, a sign that its recent momentum has faded. It has also retested the neckline of the double-top pattern.

Therefore, the most likely scenario is where it resumes the downtrend, potentially to the next key support level at 1.3000. A move above the 200-day moving at 1.3260 will invalidate the bearish outlook.

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