GBP/USD Signal 20/10: Bullish Outlook Ahead Of UK Jobs Data

(MENAFN- Daily Forex) Bullish view

Buy the GBP/USD pair and set a take-profit at 1.3400. Add a stop-loss at 1.3250. Timeline: 1-2 days.

Bearish view

Sell the GBP/USD pair and set a take-profit at 1.3250. Add a stop-loss at 1.3400.

GBP/USD held steady on Tuesday as investors waited for important macro data from the United Kingdom, which will provide more hints on what to expect from the Bank of England (BoE) in the next meeting. It was trading at 1.3312, up by nearly 200 pips from its lowest level this month.

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The GBP/USD exchange rate rose as market participants reacted to the ongoing UK jobs data. Economists expect the report to show that the economy created 20k jobs in the three months to 67k. The unemployment rate is expected to remain at 4.9%, with the average earnings index plus bonus rising 3.8%.

These numbers will come a day before the Office of National Statistics (ONS) releases the official jobs numbers. Economists expect the data to show that the headline CPI rose from 3.1% in August to 3.4% in September. If this happens, it means that the UK inflation rate is moving further away from the bank's 2% target.

These numbers will help the BoE when making its interest rate decision. Economists expect the bank to hike interest rates by 25 basis points, a move it hope will help it lower inflation.

UK inflation will likely remain steady in the coming months, especially now that energy prices are rising. Brent, the global benchmark, rose to $109.84 on Tuesday morning. West Texas Intermediate (WTI) rose to 70

The GBP/USD pair will also react to several important macro data points from the United States, including building permits, housing starts, and pending home sales. Economists expect the report to show that building permits fell 1.39 million from 1.4 million in August/USD Technical Analysis

On the charts, the GBP/USD pair has rebounded in the past few days. It has jumped from a low of 1.3135 on October 14 to the current 1.3316.

EURUSD Chart by TradingView

The pair found a strong support level at 1.3161, its lowest level in April and June this year. It remains below the 50-day moving average, while the Relative Strength Index (RSI) jumped above the neutral level of 50.

The pair will likely continue rising as investors target the psychological level of 1.3383, the 100-day moving average. A move above that level will point to more gains, potentially to the resistance level of 1.1400.

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