Affiliate Disclosure
Affiliate Disclosure DailyForex.com 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: Volatility Ahead of Fed and BoE Decisions

By 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, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

Bearish view

  • Sell the GBP/USD pair and set a take-profit at 1.2800.
  • Add a stop-loss at 1.3000.
  • Timeline: 1-2 days.

Bullish view

  • Buy the GBP/USD pair and set a take-profit at 1.3025.
  • Add a stop-loss at 1.2800.

GBP/USD Signal Today - 29/07: Volatility Ahead (Chart)

The GBP/USD pair will be in the spotlight this week as the Federal Reserve and the Bank of England (BoE) deliver their interest rate decisions. It retreated to 1.2865 on Monday morning, down from this month’s high of 1.3045.

BoE and FOMC decisions

The GBP/USD pair rose slightly on Friday after the US published June’s personal consumption expenditure (PCE) inflation report.

According to the Bureau of Economic Analysis, the headline PCE index dropped to 2.5% in June while the core PCE remained steady at 2.6%. On a MoM basis, the two figures rose slightly to 0.1% and 0.2%.

Top Forex Brokers

1
Get Started 74% of retail CFD accounts lose money Read Review

These numbers mean that the US inflation is falling, although it remains stubbornly above the Federal Reserve target of 2.0%.

The data came ahead of the upcoming US consumer confidence data set for Tuesday and the Federal Reserve decision. Analysts expect the Fed to leave rates unchanged between 5.25% and 5.50% in this meeting.

The Fed will likely maintain its data-dependence stance and then point to a rate cut in its September rate cut. By then, the US will have published more economic data on inflation and the labor market. One of these data, the non-farm payrolls (NFP), will come out on Friday.

The next important GBP/USD news will come out on Thursday when the Bank of England (BoE) will deliver its interest rate decision. Unlike the Fed, analysts have mixed opinions on what to expect from the BoE.

With inflation falling to the bank’s target, most analysts expect the bank to cut interest rates by 0.25% to 5.0%. However, some analysts believe that the bank may decide to leave interest rates unchanged and point to a September cut.

GBP/USD technical analysis

The GBP/USD exchange rate formed a shooting star candlestick pattern on July 17, leading to a sell-off in the past few days. It retreated below the important support point at 1.2892, its highest point on March 8th.

The pair has remained above the 50-day and 25-day Exponential Moving Averages while the two lines of the MACD have formed a bearish crossover. Also, the two lines of the Stochastic Oscillator have pointed downwards.

Therefore, the pair will likely continue falling ahead of the upcoming Fed and BoE decisions. This trend could see it drop to the key support point at 1.2800.

Ready to trade our free daily Forex trading signals? We’ve shortlisted the best UK forex brokers 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, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.
 

Most Visited Forex Broker Reviews