GBP/USD Forex Signal 12/01: Slips Below Key Support (Chart)

(MENAFN- Daily Forex) Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3185.
• 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 1.3185.

The GBP/USD pair has suffered a harsh reversal, moving from the year-to-date high of 1.3566 to the current 1.3400. It has slumped to the lowest level since December 22nd as traders focus on the upcoming macro data from the US and the UK Inflation and UK GDP Data

The GBP/USD exchange rate has retreated in the past few days as traders now focus on key macro data from the United States.

The US will publish the December consumer inflation report on Tuesday. Economists polled by Reuters expect the report to show that the core CPI rose slightly from 2.6% in November to 2.7%. Core inflation, on the other hand, is expected to remain unchanged at 2.7%.

The inflation report will come a few days after the Bureau of Labor Statistics (BLS) published the non-farm payrolls (NFP) report. A report showed that the economy created 55k jobs as the unemployment rate retreated from 4.6% in November to 4.4%.

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These numbers will help the Federal Reserve to determine whether the bank will cut interest rates or not. For now, Polymarket traders expect the bank will deliver two rate cuts this year.

The other important data to watch will be new home sales, which will come out on Tuesday. The US will also release the Producer Price Index (PPI) and retail sales data on Wednesday.

Meanwhile, the UK will publish the key GDP report on Thursday. Economists expect the data to show that the economy was flat in November after contracting by 0.1% in October. The UK will also publish the latest manufacturing and industrial production data.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The GBP/USD exchange rate has pulled back from the year-to-date high of 1.3566 to the current 1.3400. It has moved below the strong pivot reverse point of the Murrey Math Lines tool.

The pair has also moved below the 50-day Exponential Moving Average (EMA) and the lower side of the ascending channel. Also, the Relative Strength Index (RSI) has continued falling and has moved below the neutral point at 50.

Therefore, the pair will likely continue falling as sellers target the next key support level at 1.3183, which is the Major S/R pivot point of the Murrey Math Lines tool.

On the flip side, a move above the resistance level at 1.3500 will invalidate the bearish outlook.

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