GBP/USD Forex Signal 10/09: Settles At Key Support

(MENAFN- Daily Forex) Bullish view

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Buy the GBP/USD pair and set a take-profit at 1.3650. Add a stop-loss at 1.3450. Timeline: 1-2 days.

Bearish view

Sell the GBP/USD pair and set a take-profit at 1.3450. Add a stop-loss at 1.3650.

GBP/USD pair wavered as traders reacted to the ongoing jitters in the bond market and as crude oil prices soared. It jumped to 1.3545, with traders focusing on the upcoming macro data from the United States and the UK Oil Prices and Bond Yields Jump

The GBP/USD pair has done well in the past few days as investors watch the developments in the energy market. Brent, the global benchmark, jumped to over $101, while the West Texas Intermediate (WTI) rose to $97. This surge happened as the US and Iran continued their fighting, raising concerns of a prolonged conflict.

Russia and Ukraine, and Saudi Arabia and Houthis, have continued fighting. As a result, the number of ships crossing the Strait of Hormuz and the Bab el-Mandeb Strait has continued to dwindle in the past few days.

Energy prices are rising as traders wait for the upcoming US inflation reports, which will provide more information about the state of the economy. These numbers will provide a clear picture on what to expect next week when the Federal Open Market Committee (FOMC) meets next week.

A higher inflation rate than expected will raise the odds that the Fed will hike interest rates as soon as next week. Such a move would come at a time when the bond market is having through major challenges, with the ten-year rising to 4.840% and the 30-year hitting 5.28%. These yields jumped even after the Treasury Department tripled the debt buyback.

The GBP/USD pair will next react to the UK GDP report on Friday. Economists expect the data to show that the economy stalled in July after growing by 0.3% in June. The Office of National Statistics (ONS) will also release the industrial and manufacturing production data.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The daily chart shows that the GBP/USD pair has risen in the past few months, moving from the June low of 1.3140 to the current 1.3542. It has formed an ascending channel and is hovering near its lower side.

The pair has held steady above the 50-day moving average, while the two lines of the Stochastic Oscillator have continued rising. Therefore, the pair may continue rising as bulls target the upper side of the channel at 1.3675.

The alternative scenario is where the pair resumes the downtrend since it has formed a small bearish flag pattern. If this happens, a drop below the lower side of the channel will point to more downside to 1.3400.

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