The pair will likely retreat as investors target the first support at 1.2100.
- Sell the GBP/USD pair and set a take-profit at 1.2100.
- Add a stop-loss at 1.2325.
- Timeline: 2 days.
- Set a buy-stop at 1.2265 and a take-profit at 1.2325.
- Add a stop-loss at 1.2200.
The GBP/USD price is still on edge as investors wait for the upcoming economic data from the US and the UK. The pair is trading at 1.2275, which is slightly above last week’s low of 1.2157. The pair is still hovering near its lowest level in 2010.
UK and US Economic Data
The UK and the US will publish important economic data in the coming days that will likely have an impact on the GBP/USD.
The ONS will release the latestjobs data in the morning session. Economists believe that the country’s unemployment rate held well in March as the labor shortage continued. The data is expected to show that the unemployment rate declined to 4.2% in March.
At the same time, investors believe that wage growth continued as companies competed to find new workers. Without bonuses, expectation is that wages rose by 4.1% while with bonuses, they believe that wages rose by 5.4%.
Later during the day, the US will publish the latest retail sales, industrial, and manufacturing production data. Expectations are that retail sales declined in April as consumer confidence declined and the cost of most items rose.
The GBP/USD will also react to a statement by the Federal Reserve chairman. Expectations are that he will reiterate that the bank will continue tightening aggressively in a bid to lower inflation. Other Fed officials who will talk are Loretta Meister and James Bullard.
The pair is also struggling as investors continue worrying about the rising risks of a recession in the UK. there are worries that the country has become an epicenter of stagflation in Europe.
The next key data to watch will be the upcoming UK inflation data that are scheduled for Wednesday. The numbers will show that the country is still battling with elevated inflation risks.
On the 4H chart, the GBP/USD pair has been in a strong bearish trend in the past few days. The pair is now crawling back and has managed to move above the 25-day moving average. It has also moved slightly above the descending trendline that is shown in black. At the same time, the pair has moved to the standard pivot point that is shown in black.
The pair will likely retreat as investors target the first support at 1.2100. This view will be invalidated if the price moves above 1.2325.