Affiliate Disclosure
Affiliate Disclosure adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

GBP/USD Forex Signal: Extremely Bearish Below 1.2445

The GBP/USD pair flattened after the strong US consumer inflation data.

Top Forex Brokers


    Bearish view

    • Sell the GBP/USD pair and set a take-profit at 1.2400.
    • Add a stop-loss at 1.2560.
    • Timeline: 1-2 days.

    Bullish view

    • Set a buy-stop at 1.2520 and a take-profit at 1.2620.
    • Add a stop-loss at 1.2420.

    The GBP/USD was flat on Thursday after the relatively weak UK GDP data and strong US consumer inflation numbers. The pair was trading at 1.2500, a few points above this week’s low of 1.2442.

    US retail sales data ahead

    The UK economy is not doing well. Consumer inflation remains above 6%, one of the highest rate in the developed world. At the same time, data published on Wednesday showed that the economy contracted in July. Its GDP dropped by 0.5% after expanding by 0.5% in the previous month.

    Additional numbers showed that the country’s industrial production dropped by 0.7%, leading to a YoY increase of 0.4%. The two figures were worse than the expected -0.6% and 0.5%.

    The country’s construction output also retreated by 0.5% in July. Additional data published a few weeks ago revealed that the house price index (HPI) dropped at the fastest pace in years.

    Therefore, the challenge for the Bank of England (BoE) is how to deal with this stagflation. In a recent statement, Andrew Bailey, the head of the bank said that there was no need for more rate hikes.

    The GBP/USD pair flattened after the strong US consumer inflation data. According to the headline Consumer Price Index (CPI) rose by 3.7% in August as the core CPI dropped to 4.3%. These numbers mean that the Fed could decide to hike rates by 0.25% in next week’s meeting.

    The next key data that will have an impact on the GBP/USD pair will be the latest US retail sales and PPI numbers. Economists polled by Reuters expect the data to show that the headline PPI rose from 0.8% to 1.2% in August. The US will also publish the latest US retail sales numbers.

    GBP/USD technical analysis

    The GBP/USD pair has been in a downward trend since July 14 when it peaked at 1.3132. Since then, the pair has formed a descending channel shown in red. It has also moved slightly above the 78.6% Fibonacci Retracement level. The pair also dropped below the 25-period and 50-period moving averages.

    It has also formed what looks like a small double-bottom pattern. Therefore, more downside will be confirmed if the pair moves below the support at 1.2442. A move below that level will see it drop to the psychological level of 1.2400.


    Ready to trade our free daily Forex trading signals? We’ve shortlisted the best UK forex broker in the industry for you.

    Crispus Nyaga
    About Crispus Nyaga
    Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube,, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

    Most Visited Forex Broker Reviews