Bearish View
- Sell the GBP/USD pair and set a take-profit at 1.2900.
- Add a stop-loss at 1.3125.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 1.3015 and a take-profit at 1.3100.
- Add a stop-loss at 1.2900.
The GBP/USD pair wavered as traders shifted their focus to the upcoming UK budget by Rachel Reeves and the important economic data from the United States. It was trading at the psychologically important point of 1.3000, lower than the year-to-date high of 1.3427.
Top Forex Brokers
UK Budget and US Data
The GBP/USD pair moved sideways as the US dollar index rose slightly to $104.25. This price action happened after the US released strong consumer confidence data.
According to the Conference Board, confidence rose to 108.7 in October, its highest level in months. This rebound happened as many Americans remained optimistic about the labor and the stock market. The survey showed that most Americans expect the stock market to continue rallying in the next 12 months.
The next important US data will be published by the Bureau of Economic Analysis (BEA), which will release the latest GDP data. Economists expect the numbers to show that the economy expanded by 3.0% in Q3, the same reading as in the second quarter.
ADP will release the private sector payroll numbers, which are expected to show that the private sector created 101k jobs in October after adding 143k in the previous month.
The US will next release the personal consumption expenditure (PCE) report on Thursday, followed by the official jobs data on Friday.
The Fed will use these numbers to determine what to do in its meeting next week. In it, the bank is expected to either cut by 0.25% or leave them unchanged.
Meanwhile, in the UK, Rachel Reeves, the Chancellor of the Exchequer will deliver her budget statement, which the Prime Minister has hinted that will be painful. The budget will have some tax cuts and hikes as she works to close a £22 billion gap.
GBP/USD Technical Analysis
The GBP/USD exchange pair has suffered a harsh reversal this month, erasing some of the gains made in September. It has flipped the 50-day moving average into a resistance point. The pair has moved below the important support at 1.3140, its highest swing in July 2023.
Most importantly, the pair remains above the 23.6% Fibonacci Retracement point at 1.2700. Also, it has formed a rising broadening wedge, a popular bearish reversal pattern. Therefore, the pair will likely have a bearish breakout, with the next point to watch being the 23.6% point at 1.2700.
Ready to trade our daily Forex signal? Check out the best forex brokers in the UK worth using.