Bullish view
- Buy the GBP/USD pair and set a take-profit at 1.3030.
- Add a stop-loss at 1.2900.
- Timeline: 1-2 days.
Bearish view
- Sell the GBP/USD pair and set a take-profit at 1.2900.
- Add a stop-loss at 1.3030.
The GBP/USD trading pair continued its strong rally this week after the strong UK GDP data and the weak US inflation numbers. It has risen for three consecutive days and has moved to its highest level since July last year.
Sterling rally gains momentum
The British pound has become the best performing currency in the developed world recently. It has regained its momentum after the UK concluded its general election in which the Labour Party won by a large margin.
The pair continued its bull run last week after Huw Pill, the Bank of England’s Chief Economist, warned that the bank would be patient when determining the next rate cut. He believes that the country’s core inflation is still stubbornly high.
The GBP/USD pair’s rally continued after the UK published strong GDP numbers. According to the Office of National Statistics (ONS), the British economy expanded by 0.4% in May, beating the consensus estimate of 0.1%.
Looking ahead, this will be an important week since the UK will publish the latest inflation data on Wednesday. Economists expect the report to show that the headline Consumer Price Index (CPI) dropped from 2.0% in May to 1.9% in June.
The core CPI is expected to have remained at 3.5%. If these estimates are correct, they will likely push the BoE to start cutting interest rates in the next meeting on August 1st. The bank could also decide to maintain rates steady and then cut in September.
Meanwhile, Jerome Powell will deliver a statement later on Monday. This will be an important speech since it will come a few days after the US published another set of encouraging inflation data.
The report showed that the headline CPI dropped to 3.0% in June while the core CPI continued its strong downtrend.
GBP/USD technical analysis
The daily chart shows that the GBP/USD pair has been in a strong bullish trend in the past few weeks. It finally crossed the crucial resistance point at 1.2827, its highest point in December, May, and June.
Also, the pair has moved above the 50-day moving average and the second resistance point of the Woodie pivot point. The Relative Strength Index (RSI) and the Stochastic Oscillator have all moved to the overbought level.
Therefore, the pair will likely continue rising as buyers target the third resistance of the pivot point at 1.3030.
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https://news.google.com/rss/articles/CBMiXWh0dHBzOi8vd3d3LmRhaWx5Zm9yZXguY29tL2ZvcmV4LXRlY2huaWNhbC1hbmFseXNpcy8yMDI0LzA3L2dicHVzZC1zaWduYWwtMTUtanVseS0yMDI0LzIxNDkwNNIBAA?oc=5
2024-07-16 19:28:23Z
CBMiXWh0dHBzOi8vd3d3LmRhaWx5Zm9yZXguY29tL2ZvcmV4LXRlY2huaWNhbC1hbmFseXNpcy8yMDI0LzA3L2dicHVzZC1zaWduYWwtMTUtanVseS0yMDI0LzIxNDkwNNIBAA
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