Bearish view
- Set a sell-stop at 1.3667 (Friday low).
- Add a take-profit at 1.3600 and stop-loss at 1.3785.
Bullish view
- Set a buy stop at 1.3785 and a take-profit at 1.3850.
- Add a stop-loss at 1.3700.
The GBP/USD price is in a holding pattern ahead of key economic numbers from the United States and the UK. It is trading at 1.3735, which is slightly above last week’s low of 1.3666.
UK GDP and US CPI data ahead
The GBP/USD will today react to the latest GDP data from the UK that the Office of National Statistics (ONS) will publish in the morning session. These numbers will provide evidence on the recent performance of the UK economy.
The ONS will also publish the February manufacturing and industrial production data. The median estimate for manufacturing production to rebound from -2.3% to 0.5% month-on-month and from -5.2% to -5.1% year-on-year. Similarly, industrial production is expected to improve from -4.9% to -4.5% The ONS will also release the latest construction output and trade data.
Economists expect that the UK economy will rebound at a faster pace than other countries. That’s because the government has already vaccinated millions of people. And this week, it has started to gradually open some key businesses like pubs and gyms.
The GBP/USD will also react to the latest US inflation numbers that will come out in the afternoon session. In fact, these numbers will be more important than those from the UK. In general, analysts expect the data to show that the headline consumer price index rose from 1.7% to 2.5% year-on-year. They see the core CPI rising from 1.4% to 1.6%.
In general, US inflation likely rose in March because of the ongoing reopening in most states and the recent stimulus by the federal government. The stimulus probably helped more people boost their spending, which helped to push prices higher. Also, the recent higher oil prices also contributed.
GBP/USD Technical Forecast
On Friday, the GBP/USD pair declined to 1.3667, which was an important support where it had struggled to move below on March 25. This price was also slightly below the 78.6% Fibonacci retracement level.
Yesterday, the pair bounced back and reached a high of 1.3778. This bounce is part of the handle section of the inverted cup and handle pattern. It is also at the same level as the 25-day and 15-day EMA. Therefore, the pair will likely resume the downward trend and move below the support at 1.3667.
