Bullish view
- Set a buy-stop at 1.1640 and a take-profit at 1.1760.
- Add a stop-loss at 1.1500.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.1545 and a take-profit at 1.1400.
- Add a stop-loss at 1.1650.
The GBP/USD price moved upwards as focus shifts to important economic data from the United States and the UK. It rose to a high of 1.1645 on Friday, which was the highest level since August 31st. The price was also a few pips above the lowest point this month.
Important US and UK inflation data ahead
The GBP/USD exchange rate will be in the spotlight this week as investors focus on key economic data from the UK and the US. These numbers will provide more information about the state of the two economies and the potential interest rate decisions.
On Monday, the UK will publish the latest GDP numbers for the second quarter and July. Economists expect the data to show that the economy expanded by 0.3% in July after slipping by 0.6% in the previous month.
They also expect the numbers to reveal that manufacturing, industrial, and construction output continued rebounding in July. For example, the median estimate is that industrial production rose by 1.9% while manufacturing production rose by 1.6%.
The other key data from the UK will be the latest jobs numbers. Economists expect the data t reveal that the labor market continued tightening in July. They see the unemployment rate remaining at 3.8%. The UK will also publish the latest inflation number. Analysts expect the data to show that the headline CPI rose slightly from 10.1% while core CPI rose to 6.3%.
Finally, the UK will publish the latest retail sales on Friday. However, the most important event will be the interest rate decision by the Bank of England (BoE). The bank is expected to hike interest rate by another 0.50%.
Meanwhile, in the United States, the Bureau of Labor Statistics will publish the latest inflation data on Tuesday and Wednesday. Economists expect that US inflation eased slightly in August even though the Fed will likely continue hiking rates.
GBP/USD forecast
The GBP/USD pair made some comeback in the past few days. It has formed a small inverted head and shoulders pattern, which is usually a bullish sign. The pair has also moved above the 25-day and 50-day moving averages while the MACD has moved slightly above the neutral point.
Therefore, the pair will likely continue rising as bulls target the important resistance level at 1.1757. The stop-loss for this trade will be at 1.1500.
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