GBP/USD Forex Signal 08/12: Extremely Bullish (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3500.
• Add a stop-loss at 1.3200.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3200.
• Add a stop-loss at 1.3500.

The GBP/USD exchange rate held steady and rose to its highest level since October 27 as the US dollar softened ahead of the Federal Reserve interest rate decision. It has jumped from last month's low of 3010 Reserve Decision and UK GDP Data

The GBP/USD exchange rate has held steady in the past few days, moving from a low of 1.3010 in November to the current 1.3330.

This rebound happened as the US dollar softened as market participants predicted that the Federal Reserve will cut interest rates this week and continue with the process next year.

Polymarket odds of the Fed cutting rates in the upcoming meeting rose to 93% on Polymarket and Kalshi, two of the biggest players in the prediction markets.

Most importantly, traders anticipate that US rate cuts will come much lower next year as Donald Trump is expected to name Kevin Hassett as the next head of the Federal Reserve. Hassett has always supported Trump's policies and now favors cutting rates aggressively to boost the economy.

The GBP/USD exchange rate will also react to the upcoming US inflation report, which will come out shortly after the Federal Reserve rate decision. Economists expect the report to show that inflation held steady last month, with the headline producer price index rising to 2.7%.

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Meanwhile, the Office of National Statistics (ONS)will publish the latest UK GDP data on Friday. Economists polled by Reuters expect the data to show that the economy expanded by 0.1% in October after shrinking by 0.1% in the previous month. This figure will translate to an annual growth rate of 1.4%, higher than the previous 1.1%.GBP/USD Technical Analysis

The daily timeframe chart shows that the GBP/USD exchange rate has tilted upwards, moving from a low of 1.3010 in November to the current 1.33330. This price is slightly below the 23.6% Fibonacci Retracement level at 1.3400.

EURUSD Chart by TradingView

It has also moved above the upper side of the bullish flag point and the 50-day Exponential Moving Average (EMA). Also, the Relative Strength Index (RSI) has pointed upwards and is nearing the overbought level at 70. The MACD indicator has also pointed upwards in the past few days.

Therefore, the most likely scenario is where the pair continues rising as bulls target the key resistance level at 1.3500 ahead or after the Fed interest rate decision.

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