GBP/USD Forex Signal 12/02: Bullish Above 1.3730 (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3800.
• Add a stop-loss at 1.3500.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3500.
• Add a stop-loss at 1.3800.

The GBP/USD exchange rate pulled back slightly after the US reported a stronger jobs report than expected. It retreated to a low of 1.3627, down from this week's high of 1.3720, as focus shifts to the upcoming US inflation and UK GDP reports

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The GBP/USD pair retreated after the United States published strong jobs reports. Data compiled by the Bureau of Labor Statistics showed that the economy created 130,000 jobs, higher than the sector median of 70,000.

The report showed that the unemployment rate retreated to 4.3% from the previous 4.4%. It also showed that wage growth continued in the past few months. This happened even as some large companies like Amazon and Target announced large layoffs.

Therefore, the report means that the Federal Reserve may have a difficult period cutting interest rates. However, there is also a possibility that the BLS will downgrade the report as it has done in the past.

The next important catalyst for the GBP/USD pair will be the latest inflation report. Economists polled by Reuters expect the upcoming report to show that the headline CPI dropped from 2.7% in December to 2.6% in January. Core inflation, which excludes the volatile food and energy prices, is expected to come in at 2.5% from the previous 2.6%.

If these estimates are accurate, it may put more pressure on the Federal Reserve to cut interest rates.

The other GBP/USD news will come from the UK, where the Office of National Statistics (ONS) will publish the latest GDP data. Economists expect the upcoming report to show that the economy slowed to 1.2% in the fourth quarter from the previous 1.3%.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The GBP/USD pair has retreated in the past few days, moving from a high of 1.3730 to the current 1.3630. This retreat happened as the US Dollar Index (DXY) bounced back after the strong US jobs report.

On the daily chart, the pair remains above the 50-day Exponential Moving Average (EMA). The two lines of the Percentage Price Oscillator (PPO) have made a bearish crossover.

It remains below the important resistance level at 1.3730, its highest level in September last year. Therefore, the pair will likely remain in this range on Thursday. A bullish rebound above the key resistance at 1.3730 will point to more gains, potentially to the year-to-date high of 1.3865.

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