Bullish view
Buy the GBP/USD pair and set a take-profit at 1.3700.
Add a stop-loss at 1.3450.
Timeline: 1-2 days.
Bearish view
Sell the GBP/USD pair and set a take-profit at 1.3450.
Add a stop-loss at 1.3650.
The GBP/USD exchange rate will be in the spotlight this week as the geopolitical tensions remain and the Office of National Statistics (ONS) releases key macro data. It was trading at 1.3520, a few points below last week's high of 1.3600.
UK Jobs and Inflation Data Ahead
The GBP/USD pair will be in focus as investors react to key macro data from the United Kingdom.
A report released on Thursday showed that the economy expanded by 0.5% in February, higher than what analysts were expecting. This expansion was better than the expected 0.1% and was mostly because of the services sector.
The UK will next release the next retail sales and consumer inflation reports on Tuesday and Wednesday, respectively.
Economists polled by Reuters expect the upcoming report to show that the economy’s unemployment rate remained intact at 5.2%. They also expect the economy to have lost 35k jobs in February after adding 84k a month earlier.
Another report is expected to reveal that inflation surged in March as the Iran war pushed prices higher. The headline Consumer Price Index (CPI) is expected to come in at 3.4%, up from 3% in the previous month. Also, the Producer Price Index is expected to come in at 2.9%, higher than the previous 1.7%.
The GBP/USD pair will also react to the upcoming US retail sales and pending home sales report on Tuesday.
Most importantly, the pair will next react to the ongoing developments between the US and Iran. After announcing a major agreement on Friday, the two relapsed on Saturday as Iran closed the Strait of Hormuz. It pointed to the fact that the US had maintained the blockade on Iranian ships.
GBP/USD Technical Analysis
The daily chart shows that the AUD/USD pair has been in a strong uptrend in the past few weeks, rising from a low of 1.3150 in March to a high of 1.3600 last week.
It has moved above the upper side of the falling wedge pattern, which is made up of two descending and converging trendlines. It also moved above the right shoulder of her inverted head-and-shoulders pattern. Also, it remains above the 50-day moving average and the Supertrend indicator.
Therefore, the pair will likely resume the uptrend, potentially to the psychological level at 1.3700.