Bullish view
- Buy the GBP /USD pair and set a take-profit at 1.3565.
- Add a stop-loss at 1.3350.
- Timeline: 1-2 days.
Bearish view
- Sell the GBP/USD pair and set a take-profit at 1.3350.
- Add a stop-loss at 1.3565.
The GBP/USD pair wavered after the US released encouraging retail sales data and as traders waited for Donald Trump’s reaction to Iran’s protests. It was trading at 1.3427, down modestly from this month’s high of 1.3568.
UK to Publish Key GDP Data
The GBP/USD exchange rate remained in a tight range after the US released some notable macro data on Wednesday and after the Supreme Court failed to deliver its ruling on Donald Trump's tariffs.
Data showed that retail sales rebounded from negative 0.1% in November to 0.6% in December. They rose by 3.3% on an annualized basis.
More data showed that the headline Producer Price Index (PPI) dropped from 3% in November to 2.8% in December, while the core figure remained unchanged at 2.9%. These numbers remained much higher than the Federal Reserve's target of 2.0%.
The US will publish more macro data later today. For example, the Commerce Department will publish the latest export and import price data, which will provide more information on the impact of Donald Trump's tariffs. The other key data to watch will be the New York and Philadelphia manufacturing index and the initial and continuing jobless data.
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Meanwhile, in the UK, the Office of National Statistics (ONS) will publish the latest GDP data, which will provide more information about the country’s growth. Economists expect the data to show that the economy grew by 0.1% in October to minus 0.1% in November, leading to annualized growth of 1.1%.
The UK will also publish the latest manufacturing and industrial production data. Data compiled by TradingEconomics shows that the manufacturing production rose by 1.1%, while the industrial production eased by 0.8% in November.
GBP/USD Technical Analysis
The daily timeframe chart shows that the GBP/USD exchange rate rebounded from a low of 1.3000 in November to the current 1.3430. It has moved above the 23.6% Fibonacci Retracement level.
The pair has remained above the 50-day and 100-day Exponential Moving Averages (EM). It has also formed a bullish flag pattern, which is made up of a vertical line and a descending channel.
Therefore, the most likely GBP/USD forecast is bullish, with the next key target to watch being the year-to-date high of 1.3565. A move above that level will point to more gains, potentially to the psychological level at 1.3600.
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