The pair will likely have a bullish break-out in the coming days as traders wait for the latest FOMC decision.
- Set a buy-stop at 1.2070 and a take-profit at 1.2150.
- Add a stop-loss at 1.2000.
- Timeline: 1 day.
- Set a sell-stop at 1.1990 and a take-profit at 1.1900.
- Add a stop-loss at 1.2050.
The GBP/USD price tilted lower after a weekend of chaos at Dover and as investors wait for the upcoming Fed interest rate decision. The pair was trading at 1.2000 on Monday morning, which was slightly lower than last week’s high of 1.2072.
Consumer Confidence, Fed, GDP, and Dover Chaos
The GBP/USD pair moved sideways last week as investors reflected on important economic data from the UK. On Tuesday, the Office of National Statistics (ONS) published strong jobs numbers as the labor market tightened.
The ONS also published strong UK inflation data. The numbers revealed that the country’s consumer inflation jumped to a multi-decade high of 9.1% as the cost of oil and gas surged. This rise was in line with the Phillips Curve, which states that inflation rises when the unemployment rate retreats.
Finally, on Friday, the ONS published weak retail sales numbers. The data revealed that the country’s sales tumbled in June as inflation rose. Flash manufacturing and services PMIs also retreated slightly in July.
The GBP/USD price declined slightly on Monday morning as investors reflected on the weekend of chaos at Dover and the Eurotunnel. There were long lined at Dover, which is an important shipping place for the UK and the EU. This crisis risks putting more pressure on the UK economy.
The next key catalysts for the GBP/USD price will be the upcoming US consumer confidence data scheduled for Tuesday this week. Analysts expect that confidence declined sharply in July as the cost of gas and other products continued rising.
The FOMC will conclude its monetary policy meeting and deliver its rate hike on Wednesday. Analysts expect that the bank will hike by either 0.75% or 1% in this meeting. Finally, the US will publish the first estimate of Q2 GDP numbers on Thursday.
The GBP/USD pair retreated slightly on Monday morning as traders repositioned themselves for the upcoming Fed decision. On the four-hour chart, the price is at the first resistance of the standard pivot point.
It has also moved slightly above the 50-day moving average and formed an inverted head and shoulders pattern. In price action analysis, this pattern is usually a bullish signal.
Therefore, the pair will likely have a bullish break-out in the coming days as traders wait for the latest FOMC decision. If this happens, the next key resistance to watch will be at 1.2200.
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