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GBP/USD Forex Signal: Rising Broadening Wedge Pattern Forms

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 1.3000.
  • Add a stop-loss at 1.3265.
  • Timeline: 1-2 days.

Bullish view

  • Set a buy-stop at 1.3115 and a take-profit at 1.3200.
  • Add a stop-loss at 1.3050.

GBP/USD Signal Today - 04/09: Wedge Pattern Forms (Chart)

The GBP/USD pair continued its downtrend in the overnight session as the US dollar recovery accelerated. The pair dropped to a low of 1.3105 on Wednesday morning, its lowest point since August 23rd.

US dollar rebounds

The GBP/USD pair retreated as the US dollar index (DXY) jumped to a high of $101.90, its highest point since August 21st. It has risen by over 1.27% from its lowest level last month/

The greenback rebounded even as odds of higher interest rate cuts by the Federal Reserve continued. Crude oil continued falling, with Brent, the global benchmark, falling below $75 for the first time this year. Lower oil prices mean that the US inflation will continue falling in the coming months.

At the same time, the US published a weak set of economic numbers. A report by S&P Global showed that the manufacturing PMI dropped to 47.9 in August while another one by ISM revealed that the PMI rose slightly to 47.5.

The manufacturing sector in the US has recovered at a slower pace than the services sector even after the Biden administration pumped billions to the sector.

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Therefore, if odds of a hard landing rise, there is a likelihood that the Federal Reserve will deliver a higher interest rates than 0.25% in its next meeting. These odds will be confirmed later this week when the US releases the latest jobs report.

The next key data to watch will be the upcoming UK composite and services PMI numbers. Economists expect the data to show that the services PMI rose to 53.3 while the composite figure jumped to 53.4 in August. The British economy has been holding better than most analysts were expecting.

GBP/USD technical analysis

The GBP/USD pair has come under pressure this week as the US dollar rose. This retreat happened after the pair rose to a high of 1.3265 last week. This was an important price because it was the upper side of the rising broadening wedge chart pattern. In most periods, this pattern is one of the most bearish signs in the market.

The pair is hovering slightly above the key support level at 1.3045, its highest level in July this year. It remains above the 50-day moving average while the RSI and the Stochastic Oscillator have tilted downwards. These oscillators have more room to reach their oversold levels. Therefore, the pair will likely continue falling as sellers target the key support point at 1.3000.

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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.
 

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