GBP/USD Forex Signal 07/10: Extremely Bearish Below 1.3172

(MENAFN- Daily Forex) Bearish view

Sell the GBP/USD pair and set a take-profit at 1.3000. Add a stop-loss at 1.3400. Timeline: 1-2 days.

Bullish view

Buy the GBP/USD pair and set a take-profit at 1.3400. Add a stop-loss at 1.3000.

The GBP/USD pair held steady as the US dollar's rally stalled ahead of the upcoming Federal Reserve minutes. The pair climbed to 1.3265, a few points above this month's low of 1.3185. It remains 4.36% from its highest point this year.Federal Reserve Minutes Ahead

The GBP/USD pair has wavered as traders waited for the upcoming Federal Reserve minutes of the last meeting. These minutes will provide more information about what happened in the last meeting in which officials, including Kevin Warsh, decided to hike interest rates by 0.25% for the first time this year.

Things have changed after that meeting. Data released last week showed that the unemployment rate rose to 4.2% as the economy created just 29,000 jobs, much lower than the expected 90,000. A separate report showed that inflation softened a bit in August.

EURUSD Chart by TradingView

There were no major macro data releases from the US or UK this week. The only notable figures were the services and composite PMI readings published on Monday. While important, these numbers rarely move the market because S&P Global releases the flash estimates about two weeks earlier.

The GBP/USD pair is reacting to the performance of the US and UK bond market. In the UK, the ten-year bond yields rose to 5.4% from the year-to-date low of 4.23%. Similarly, the five-year yield is approaching 5%.

The same is happening in the US, where the ten-year rose to 5.3% and the five-year hit 5.05%. In a statement on Tuesday, Ray Dalio warned that yields may continue rising as China and Japan offload US debt.

In addition to the upcoming FOMC minutes, the pair will react to the statement by Andrew Bailey, the head of the Bank of England (BoE).

Top Regulated Brokers1 Get Started 74% of retail CFD accounts lose money GBP/USD Technical Analysis

The daily chart shows that the GBP/USD pair has moved downwards in the past few weeks, moving from a high of 1.3676 in August to the current 1.3270. It has made a series of lower lows and lower highs, and moved below the 50-day moving average.

The pair has settled slightly above the crucial support level of 1.3172, its lowest level in April, June, and October 2nd. It has remained below the Supertrend indicator. Therefore, the pair may continue the downward trend in the near term. A drop below the support level of 1.3172 will lead to more downside, potentially to 1.3000.

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