Bullish view
Buy the GBP/USD pair and set a take-profit at 1.3700.
Add a stop-loss at 1.3450.
Timeline: 1-2 days.
Bearish view
Sell the GBP/USD pair and set a take-profit at 1.3450.
Add a stop-loss at 1.3700.
The GBP/USD pair rose above the important support level at 1.3500 as investors waited for the end of the UE-Iran ceasefire and the upcoming macro data from the United States and the UK. It was trading at 1.3540, a few points above this week’s low of 1.3475.
UK Jobs and Inflation Data Ahead
The GBP/USD pair will be in the spotlight in the coming days as the UK publishes important macro data, which will shed more color on the state of the economy amid the ongoing US-Iran war.
The first data will be the upcoming UK jobs report, which will come out at 7:00 GMT time. Economists expect the report to show that the unemployment rate remained at 5.2% in February, as the economy lost 35k jobs.
The most important report will come out on Wednesday when the UK releases the March consumer inflation report. Economists believe that inflation rose in March as energy and transport costs jumped.
The headline Consumer Price Index is expected to come in at 3.4%, higher than the previous month's 3.0%. Core inflation, which excludes the volatile food and energy prices, is expected to have remained unchanged at 3.2%.
The UK’s inflation has remained above the Bank of England’s 2% target in the past few months, pushing the officials to maintain interest rates at an elevated level. Analysts expect the bank to leave rates unchanged in its upcoming meeting next week.
The GBP/USD pair will be in focus as the US releases its retail sales and pending home sales reports. Economists expect retail sales to have remained steady in March despite the elevated inflation.
Most importantly, market participants are watching the ongoing happenings in the Middle East l, where the Strait of Hormuz has been closed ahead of the deadline of the two-week ceasefire.
GBP/USD Technical Analysis
The daily chart shows that the GBP/USD pair has rebounded in the past few weeks as the US dollar weakness has continued. It has jumped from a low of 1.3162 on April 1 to 1.3540.
The pair’s 50-day and 100-day Exponential Moving Averages (EMA) are about to cross each other, while the two lines of the Percentage Price Oscillator (PPO) have jumped above the zero line.
It also completed the break-and-retest pattern by falling back to 1.3475, its highest point on March 23rd. Therefore, the pair will likely continue rising as bulls target this month's high of 1.3600. A move above that level will point to more gains, potentially to the key resistance level at 1.3700.