Bearish Sentiment Ahead of UK Data

The pair will likely retest the upper side of the channel and then resume the bearish trend to about 1.1700.

Bearish View

  • Set a sell limit at 1.1900 and a take-profit at 1.1760.
  • Add a stop-loss at 1.200.
  • Timeline: 1-2 days.

Bullish View

  • Set a buy-stop at 1.1890 and a take-profit at 1.1950.
  • Add a stop-loss at 1.1800.

The GBP/USD pair rose slightly ahead of the upcoming important economic data from the UK. Sterling rose to a high of 1.1870, the highest level since July 14th of this year. This price is about 1% above the lowest level this month.

UK Inflation and Jobs Data Ahead

The GBP/USD pair had another tough week as the US dollar strength accelerated. The dollar index surged above $108 for the first time in over 20 years after the strong inflation data. The numbers revealed that the country’s headline inflation surged to a 40-year high of 9.1%.

Additional data from the US showed that retail sales did relatively well in June. The headline retail sales rose by 1.0% in June as furniture, e-commerce, and electronics sales jumped. A week earlier, numbers revealed that the unemployment rate remained unchanged at 3.7% as the economy added over 372k jobs.

Therefore, the dollar strengthened as investors reacted to the possibility that the Federal Reserve will continue tightening in the coming months. Analysts moved their expectation from a 0.75% rate hike to about 100 basis points.

The GBP/USD pair also declined because of the ongoing political crisis in the UK. Boris Johnson said that he will resign as the country’s Prime Minister. Analysts now predict that the next PM will be Rishi Sunak, Penny Mordaunt, or Liz Truss. The pair will react to the changing political dynamics in the country.

The air will also react to the latest economic data from the UK. The Office of National Statistics (ONS) will publish the latest UK jobs data. Analysts expect the data to show that the unemployment rate remained unchanged at 3.8% in May while the average earnings index with bonuses rose to 6.9%.

The other important data will be on UK inflation, which will come out on Wednesday. Analysts expect that inflation surged to 9.2%.

GBP/USD Forecast

The GBP/USD pair has been crawling back in the past few days. It has risen to a high of 1.1870, which was higher than last week’s low of 1.1760. The pair has formed a descending channel that is shown in blue.

It has also moved slightly below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved above the neutral point at 50. Therefore, the pair will likely retest the upper side of the channel and then resume the bearish trend to about 1.1700.


Ready to trade our daily Forex signals? Here’s a list of some of the best Forex trading platforms to check out.

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading in Contracts for Difference (‘CFDs’) carries a high level of risk and can result in the loss of all your investment. As such, CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever. For more information about the risks associated with trading CFDs please find and read our ‘Product Disclosure’.

Please recognize that this website is the only official website, please do not enter other clone websites through Internet search or advertisements.

© 2011 - 2023 All Rights Reserved.