Bullish view
- Buy the GBP/USD pair and set a take-profit at 1.3015.
- Add a stop-loss at 1.2800.
- Timeline: 1-2 days.
Bearish view
- Sell the GBP/USD pair and set a take-profit at 1.2800.
- Add a stop-loss at 1.3015.
The GBP/USD exchange rate was stuck in a tight range on Tuesday ahead of the upcoming UK housing and manufacturing data. It was trading at 1.2910, down from the year-to-date high of 1.3016 ahead of Donald Trump’s Liberation Day tariffs.
UK and US economic data ahead
The GBP/USD pair moved sideways ahead of the upcoming UK House Price Index (HPI) data. Economists polled by Reuters expect the data to show that house prices rose by 0.2% in March from the previous 0.4%.
S&P Global will also release the final estimate of the UK manufacturing PMI figure. Economists see the data coming in at 44.6 in March, down from 46.9 in February. A PMI figure of less than 50 is a sign that a sector is contracting.
The GBP/USD pair will also react to the S&P Global and the ISM manufacturing PMI figures. Economists see the S&P Global data falling from 52.7 in February to 49.8 in March, while the ISM PMI fell from 50.3 to 49.6, respectively.
The other key data to watch will be the JOLTS job openings data, which are expected to slow to 7.73 million.
These numbers will be overshadowed by the upcoming tariffs by Donald Trump. He has set aside Wednesday as his Liberation Day when he will announce reciprocal tariffs on imported goods from around the world.
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It is unclear how much tariffs that Trump will apply on UK goods. Some of the most notable tariffs that the UK charges US goods are up to 25% on steel, 12% beef, and between 10% and 15% on poultry.
GBP/USD technical analysis
The daily chart shows that the GBP/USD pair bottomed at 1.2095, its lowest point in January this year. It bounced back and reached a high of 1.3016 on March 20.
The pair is hovering at the 61.8% Fibonacci Retracement level. Most importantly, the pair has formed a bullish pennant pattern, a popular continuation sign. The two lines of this pattern are nearing their confluence levels.
It has also formed a golden cross pattern as the 200-day and 50-day moving averages flipped each other. Therefore, the pair may have a bullish breakout, with the initial target being at 1.3016. A break above that level will point to more gains, possibly to the 78.6% retracement level at 1.3150, up by 1.85% from the current level.
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