Bearish view
- Sell the GBP/USD pair and set a take-profit at 1.3150.
- Add a stop-loss at 1.3425.
- Timeline: 1-2 days.
Bullish view
- Sell the GBP/USD pair and set a take-profit at 1.3425.
- Add a stop-loss at 1.3150.
The GBP/USD exchange rate has rebounded in the past two days as traders predicted that the US-Iran war would end soon. The pair rose to 1.3310, up modestly from this week's low of 1.3150 as focus turns to the upcoming US jobs data.
US Non-Farm Payrolls Data Ahead
The GBP/USD pair rose as investors predicted that the US-Iran war would end soon. In a prime time speech, President Donald Trump insisted that the war was going on well and that it would end soon.
He also maintained that he had achieved a regime change in Iran and that the new leaders were asking for negotiations. However, Iran has said that there were no negotiations going on and that it was not interested in a ceasefire.
Instead, Iran wants a complete end of the war, reparations, and a commitment that the US and Israel will not launch an attack again.
The GBP/USD pair also reacted to key macro data from the United States. A report by ADP showed that the economy created over 62k jobs in March after adding 66k in the previous month.
This report came two days before the Bureau of Labor Statistics (BLS l) released the official jobs report. Economists believe that the economy created over 50k jobs in March, while the unemployment rate rose slightly to 4.5%.
The US also released strong retail sales data, with the headline sales rising by 3.7% from 3.2% YoY. Retail sales are important because they are good measures of consumer health.
More data shows that the US manufacturing PMI rose from 52.4 in February to 52.7 in March. These numbers signal that the US economy was doing well before the war started.
GBP/USD Technical Analysis
The daily chart shows that the GBP/USD pair has been in a downtrend after peaking at 1.3872 in January to a low of 1.3151 earlier this week. It remains between the 38.2% and 23.60% Fibonacci Retracement level.
The pair has remained below the 50-day Exponential Moving Average (EMA). Also, the Supertrend indicator has remained in the red. It also remains below the Ichimoku cloud indicator.
Therefore, the pair will likely resume the downward trend, potentially to this week’s low of 1.3150. A drop below that level will point to more downside, potentially to the 50% Fibonacci Retracement level at 1.2990.