GBP/USD Signal 29/10: Forecast Ahead Of US PCE And GDP Data

(MENAFN- Daily Forex) Bearish view

Sell the GBP/USD pair and set a take-profit at 1.3200. 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 1.3200.

The GBP/USD pair remained under pressure on Thursday morning as market participants reacted to the Federal Reserve interest rate decision. It was trading at the key support level of 1.3300 as market participants waited for next week's Bank of England decision and the upcoming US macro data.

Top Regulated Brokers1 Get Started 74% of retail CFD accounts lose money US Macro Data and UK Budget

The GBP/USD pair retreated as traders reacted to several major events from the UK and the US. One of the key one was the UK budget, in which Chancellor John Healey highlighted the key priorities.

The budget included some tax cuts and hikes, including on the country's banks like Lloyds, Barclays, and HSBC. He also gave projections on the implications of his budget, including the fact that government borrowing will drop from 4.1% of the GDP this year to 1.8% by 2030. He also expects that the economy will grow by 1.% this year, 1% next year, and 1.8% in 2029.

The budget came a week before the Bank of England delivers its interest rate decision. Economists expect the bank to hike interest rates by 0.25%. Recent data showed that the economy did well in August, while inflation has remained at an elevated level.

The GBP/USD pair also reacted to the Federal Reserve interest rate decision. As was widely expected, the bank decided to leave interest rates unchanged between 3.75% and 4%. Officials maintained that they will be open to deliver more hikes as inflation remains stubbornly high.

The next important catalyst for the GBP/USD pair will be several important macro data from the United States. Some of these numbers include the PCE report, which is the Federal Reserve's favorite inflation gauge. The US will also release the first estimate of Q3 GDP data and last week's initial jobless claims.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The daily chart shows that the GBP/USD pair has been in a steady sell-off in the past few days. It dropped from last week's high of 1.3420 to a low of 1.3271.

The pair remains below the Strong, Pivot, Reverse level of the Murrey Math Lines tool. It has also slumped below the Ichimoku cloud indicator and the 50-day moving average

The pair will likely continue falling as sellers target the key support level of 1.3200. A drop below that level will point to more downside towards the Ultimate Support of 1.3184.

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