Bullish view
- Buy the GBP/USD pair and set a take-profit at 1.3600.
- Add a stop-loss at 1.3400.
- Timeline:1-2 days.
Bearish view
- Sell the GBP/USD pair and set a take-profit at 1.3400.
- Add a stop-loss at 1.3600.
The GBP/USD pair was flat at the crucial resistance level at 1.3500 as investors waited for the upcoming Federal Reserve minutes of the last monetary policy meeting. It has risen by nearly 4% from its lowest point in November as the US dollar sell-off continued.
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Federal Reserve Interest Minutes to Provide Hints on Next Meeting
The GBP/USD exchange rate was in a tight range as market participants waited for the upcoming minutes of the last monetary policy meeting. These minutes will provide more details on what happened in the last meeting three weeks ago.
The bank delivered its third interest rates cut this year, with officials hinting that it will deliver one more cut next year. Therefore, the minutes will provide more information on what happened and then help them predict what to expect in the coming year.
The GBP/USD pair will also react to the upcoming US housing data, which will provide more information on whether the sector continued doing well. The average estimate is that the house price index rose by 1.7% in October.
Meanwhile, the GBP/USD pair wavered as risks rose in the market in the final week of the year. Silver and gold prices plunged after testing their all-time highs. Similarly, American stocks pulled back, with the Nasdaq 100 and S&P 500 indices falling by over 40 basis points.
There will be no more major economic data from the US and the UK this week other than the flash manufacturing PMI report on Friday.
GBP/USD Technical Analysis
The daily timeframe chart shows that the GBP/USD pair has rebounded from a low of 1.3000 in November to the current 1.3500.
It has remained above the Supertrend indicator, while the 50-day and 100-day Exponential Moving Averages (EMA) have formed a bullish crossover pattern.
The pair has formed a small bullish flag pattern, while the Relative Strength Index (RSI) is approaching the overbought level or 70.
Therefore, the most likely forecast is bullish, with the next key resistance level being at 1.3600. The bullish outlook will be invalidated if it drops below the psychological level at 1.3400.
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