Daily Price Outlook

The GBP/USD pair has reaffirmed its downward trajectory, consolidating beneath the 1.2400 threshold. This strengthens the forecast for an ongoing primary bearish trend, paving the way towards our primary anticipated target of 1.2310.

The current bearish channel meticulously frames the projected downtrend, which receives consistent reinforcement from the EMA50. It's important to highlight that a breach of 1.2435 could propel the price towards challenging the crucial resistance at 1.2505 before embarking on another bearish maneuver. Today's anticipated trading parameters are set between a support of 1.2300 and resistance at 1.2450.

GBP/USD - Trade Idea 

Entry Price – Buy Limit 1.23798

Take Profit – 1.24463

Stop Loss – 1.23398

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$665/ -$400

Profit & Loss Per Micro Lot = +$66/ -$40

Daily Price Outlook

The GBP/USD currency pair failed to stop its declining streak and experienced a two-day decline, trading around 1.2380 during the European session on Monday. However, this decline is driven by upcoming interest rate decisions in the US and the UK, which are making traders cautious. In the US, the Federal Reserve is expected to maintain current interest rates in its upcoming meeting, but there is a possibility of slight rate increases later in 2023, strengthening the US dollar (USD) and putting pressure on GBP/USD.

Conversely, the Bank of England (BoE) is anticipated to raise UK interest rates slightly in its upcoming meeting, potentially boosting the British pound (GBP) while also introducing market uncertainty.

Influence of Central Banks and Economic Data on GBP/USD

It is worth noting that the US Federal Reserve (Fed) is likely to keep interest rates unchanged in its upcoming meeting on Wednesday. Investors are keenly watching for any hints about future rate changes. However, the market is currently factoring in a 0.25% rate increase by the end of 2023. Although, the USD faced some pressure due to disappointing US consumer sentiment data. The preliminary Michigan Consumer Sentiment Index for September was 67.7, lower than the previous 69.5 and the expected 69.1.

Hence, the news of the likely unchanged interest rates from the US Federal Reserve and the weaker US consumer sentiment data have the potential to put downward pressure on the USD, which could support the GBP/USD pair.

Factors Affecting GBP/USD Traders

Another factor influencing GBP/USD traders is the expectation that the Bank of England (BoE) will raise interest rates by 0.25% in its upcoming Thursday meeting. The BoE aims to combat rising inflation and maintain UK economic stability. However, BoE Governor Andrew Bailey's recent statement suggests that the bank may be nearing the end of its rate-hike cycle.

This, coupled with concerns about a potential recession and signs of a slowing UK job market, might push the BoE to reconsider future rate hikes. Investors will also closely monitor key economic data like the Consumer Price Index (CPI), Core CPI, and Producer Price Index (PPI) for August, set to be released on Wednesday.

Looking forward, traders will keep a close eye on US Building Permits data. These releases could provide trading opportunities within the GBP/USD pair, as they offer insights into the US housing market's health and can influence currency movements.

GBP/USD - Technical Analysis

The GBP/USD pair has reaffirmed its downward trajectory, consolidating beneath the 1.2400 threshold. This strengthens the forecast for an ongoing primary bearish trend, paving the way towards our primary anticipated target of 1.2310.

The current bearish channel meticulously frames the projected downtrend, which receives consistent reinforcement from the EMA50. It's important to highlight that a breach of 1.2435 could propel the price towards challenging the crucial resistance at 1.2505 before embarking on another bearish maneuver. Today's anticipated trading parameters are set between a support of 1.2300 and resistance at 1.2450.

Daily Price Outlook

The GBP/USD pair experienced a pronounced downtrend yesterday, successfully reaching our anticipated target of 1.2400 and currently hovering around this mark. We anticipate further potential decline, with the next significant target positioned at 1.2310.

This bearish outlook remains dominant, reinforced by the EMA50 which exerts downward pressure on the price. It's imperative to note that for the bearish momentum to persist, the price should remain below 1.2505. Today's projected trading range lies between a support level of 1.2320 and a resistance level of 1.2480.

GBP/USD - Trade Idea 

Entry Price – Sell Below 1.24516

Take Profit – 1.23734

Stop Loss – 1.25092

Risk to Reward – 1: 1.3

Profit & Loss Per Standard Lot = +$782/ -$576

Profit & Loss Per Micro Lot = +$78/ -$57

Daily Price Outlook

The GBP/USD pair is holding steady in a tight range near 1.2490. It's struggling to break above the 1.2500 mark due to upcoming US economic data. However, the pair's recent decline can be attributed to a mix of factors, including downbeat UK data and a strong US dollar.

Challenges in UK Economy and BoE's Caution

The UK's unemployment rate rose to 4.3% from 4.2%, with 207,000 job losses in July, causing concerns about a recession. Despite this, the Bank of England worries about high wages fueling inflation, as earnings grew by 8.5%. The GDP unexpectedly shrank by 0.5% in July. A BoE policymaker, Catherine Mann, believes it's too early to stop raising interest rates, but this stance is worrying investors and putting pressure on the British Pound (GBP), affecting its exchange rate with the US Dollar (USD).

US Inflation Surges in August, Impact on Fed's Decision

Apart from this, the US Bureau of Labor Statistics reported in August the highest monthly inflation increase in 14 months. The Consumer Price Index (CPI) rose by 0.6% from the previous month, exceeding expectations, and showed an annual increase of 3.7%. The core CPI, excluding food and energy prices, also increased by 0.3% month-on-month, with an annual rise of 4.3%.

While many expect the Federal Reserve (Fed) to keep interest rates unchanged at the upcoming FOMC meeting, these numbers indicate that the Fed should stay alert to the possibility of inflation picking up in the coming months. Currently, there's a 97% probability of no rate change in September, but there's a 49.2% chance of a rate hike in November, according to the CME Fedwatch Tool.

Thus, the rising US inflation and the potential for future interest rate hikes has put upward pressure on the US Dollar (USD) against the British Pound (GBP). This has led to a decline in the GBP/USD currency pair as investors seek the strength of the USD.

Market Outlook for GBP/USD Amid Upcoming US Data

Looking forward, with no UK economic data on Wednesday, the GBP/USD pair will be influenced by USD movements. Traders await US data like weekly Initial Jobless Claims, the Producer Price Index (PPI), and monthly Retail Sales. On Friday, the preliminary Michigan Consumer Sentiment Index for September will be key. These releases may guide GBP/USD trading.

GBP/USD - Technical Analysis

The GBP/USD pair experienced a pronounced downtrend yesterday, successfully reaching our anticipated target of 1.2400 and currently hovering around this mark. We anticipate further potential decline, with the next significant target positioned at 1.2310.

This bearish outlook remains dominant, reinforced by the EMA50 which exerts downward pressure on the price. It's imperative to note that for the bearish momentum to persist, the price should remain below 1.2505. Today's projected trading range lies between a support level of 1.2320 and a resistance level of 1.2480.

Daily Price Outlook

The GBP/USD currency pair has decisively breached the 1.2505 mark, evidenced by its recent daily close beneath this threshold. This move aligns with the bearish trajectory outlined within the analytical chart's bearish channel. Subsequent targets are delineated at 1.2400, extending further to 1.2310.

Given this context, a bearish orientation is anticipated for today's trading session, bolstered by the negative influence exerted by the 50-day Exponential Moving Average (EMA50). However, it's crucial to note that any ascent past the 1.2505 level, if sustained, might negate the current bearish perspective, paving the way for potential recuperative actions. For today, the projected trading spectrum spans from a support boundary of 1.2390 to a resistance cap of 1.2540.

GBP/USD - Trade Idea 

Entry Price – Sell Limit 1.24796

Take Profit – 1.24007

Stop Loss – 1.25411

Risk to Reward – 1: 1.2

Profit & Loss Per Standard Lot = +$789/ -$615

Profit & Loss Per Micro Lot = +$78/ -$61

Daily Price Outlook

The GBP/USD currency pair failed to extend its previous day's gains and lost some of its traction in response to disappointing UK GDP data. As of now, the pair is down 0.14% on the day, trading at 1.2466. Furthermore, the ongoing strength of the US dollar has also played a major role in undermining the GBP/USD currency pair. Moreover, the GBP/USD currency pair faced some additional downward pressure due to expectations that the Bank of England (BoE) is approaching the conclusion of its rate-hiking cycle.

UK Economic Data and Its Impact on GBP/USD

According to the latest data from the Office for National Statistics (ONS), the UK's economy contracted by 0.5% in July, following a 0.5% growth in June. This was worse than the expected 0.2% decline. On another note, the Index of Services for July showed a 0.1% increase in a 3-month period, beating the estimated -0.1% and matching the previous month's performance.

As a result of this news, the GBP/USD pair is experiencing further losses. Currently, it's down 0.14% for the day, trading at 1.2466 marks.

On the other side, the UK's industrial sector slowed in July. Manufacturing output fell 0.8% MoM, beating expectations, but total industrial output was down 0.7%. Annually, manufacturing production exceeded expectations at 3.0%, while total industrial output slightly missed predictions at 0.4%. The UK's goods trade balance improved to GBP-14.064 billion, and the total trade balance (non-EU) was GBP-2.361 billion for July, an improvement from June.

Therefore, the information of a slowing UK industrial sector, despite some positive aspects, put downward pressure on the GBP/USD pair, contributing to its decline.

Fed's Policy Outlook and Its Impact on GBP/USD

Across the ocean, the Federal Reserve (Fed) is expected to take a break at its upcoming meeting, but there's still a chance of one more 0.25% rate hike this year. Recent positive US economic data suggests a strong economy and ongoing inflation could support higher rates. However, the focus is now on the US CPI report for hints on future rate hikes. Meanwhile, the possibility of higher US rates keeps Treasury bond yields up, benefiting the safe-haven US Dollar. This, coupled with market caution, limits significant gains for the GBP/USD pair.

GBP/USD - Technical Analysis

The GBP/USD currency pair has decisively breached the 1.2505 mark, evidenced by its recent daily close beneath this threshold. This move aligns with the bearish trajectory outlined within the analytical chart's bearish channel. Subsequent targets are delineated at 1.2400, extending further to 1.2310.

Given this context, a bearish orientation is anticipated for today's trading session, bolstered by the negative influence exerted by the 50-day Exponential Moving Average (EMA50). However, it's crucial to note that any ascent past the 1.2505 level, if sustained, might negate the current bearish perspective, paving the way for potential recuperative actions. For today, the projected trading spectrum spans from a support boundary of 1.2390 to a resistance cap of 1.2540.

Daily Price Outlook

During the Asian trading session on Monday, the GBP/USD currency pair managed to recover from a three-month low. However, the recovery was driven by a modest decline in the US dollar, which had previously reached a multi-month high. The British pound gained strength against the US dollar because the dollar weakened slightly, prompting traders to place strong position.

Hawkish BoJ Comments and Mixed Chinese Data Impacting GBP/USD

It is worth noting that the Bank of Japan's (BoJ) Governor Kazuo Ueda made some hawkish remarks over the weekend, boosting demand for the Japanese Yen (JPY) and putting pressure on the US Dollar (USD). Additionally, a positive vibe in the stock markets pulled the safe-haven US dollar away from its highest level since March, which supported the GBP/USD pair.

Over the weekend, data showed that China's consumer prices rose in August, and the Producer Price Index decline slowed down. This suggests that China's economy might be stabilizing after a rough patch this year. Investors are also hopeful for more stimulus from China. However, some indicators show that China's manufacturing is still struggling, and the growth in the services sector is slowing down. This mixed economic picture could temper market optimism.

Hence, the hawkish BoJ comments boosted the Japanese Yen and pressured the US Dollar, aiding the GBP/USD pair.

Central Bank Actions Impacting GBP/USD

Across the ocean, the belief that the Federal Reserve (Fed) will stick to its tougher stance is likely to restrain the US Dollar's fall and limit GBP/USD gains. Market players think the Fed will keep interest rates high for a while. Some officials even suggest raising rates more than needed, boosting US Treasury bond yields and supporting the USD.

Meanwhile, Bank of England (BoE) Governor Andrew Bailey warned about ongoing high inflation, hinting at more rate hikes. However, he also hinted that the BoE might be close to stopping rate hikes. This may hinder any significant rise in GBP/USD, at least for now.

GBP/USD - Technical Analysis

The GBP/USD pair is revisiting the 1.2505 mark. Recent higher lows observed indicate a potential ascent in the upcoming trading sessions. If the pair exceeds the aforementioned level, it is poised to approach 1.2625.

Today's outlook is inclined towards a bullish trend, bolstered by favorable indications from the stochastic oscillator. It's important to note, however, that if the pair cannot surpass the 1.2505 threshold, it might revert to its predominant bearish trajectory with an aim towards 1.2395.

We project the GBP/USD's trading spectrum for the day to span between a 1.2430 support and a 1.2590 resistance. The day's anticipated trend is bullish.

Daily Price Outlook

The GBP/USD pair is revisiting the 1.2505 mark. Recent higher lows observed indicate a potential ascent in the upcoming trading sessions. If the pair exceeds the aforementioned level, it is poised to approach 1.2625.

Today's outlook is inclined towards a bullish trend, bolstered by favorable indications from the stochastic oscillator. It's important to note, however, that if the pair cannot surpass the 1.2505 threshold, it might revert to its predominant bearish trajectory with an aim towards 1.2395.

We project the GBP/USD's trading spectrum for the day to span between a 1.2430 support and a 1.2590 resistance. The day's anticipated trend is bullish.

GBP/USD - Trade Idea 

Entry Price – Buy Above 1.25117

Take Profit – 1.25735

Stop Loss – 1.24606

Risk to Reward – 1: 1.21

Profit & Loss Per Standard Lot = +$618/ -$511

Profit & Loss Per Micro Lot = +$61/ -$51

Daily Price Outlook

The GBP/USD pair has distinctly extended its downward movement, decisively surpassing our initial target of 1.2625 and settling beneath it. This move solidifies the dominance of the bearish trend both in intraday and short-term scenarios, following the evident bearish channel depicted on the chart. Our subsequent target is set at 1.2505. The projected trading boundaries for today are a support at 1.2500 and a resistance at 1.2660.

The EMA50 consistently reinforces the anticipated bearish momentum. This prediction stands as long as the pair doesn't breach the 1.2625 level and sustain above it.

Consequently, our analysis remains bearish for both the intraday and short-term, driven by the downward force exerted by the EMA50. A breach and a subsequent stabilization above 1.2625 could initiate potential recovery endeavors, with an initial aim at the 1.2625 zone.

GBP/USD - Trade Idea

Entry Price – Buy Above 1.25926

Take Profit – 1.26571

Stop Loss – 1.25543

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$645/ -$383

Profit & Loss Per Micro Lot = +$64/ -$38

Daily Price Outlook

The GBP/USD currency pair held above 1.2600 during the early European session, trading at 1.2612 with a 0.17% gain. Buyers showed interest above 1.2600. However, US Nonfarm Payrolls for August exceeded expectations, and Manufacturing PMI improved to 47.6. On the other hand, the UK's Manufacturing PMI dropped from 45.3 in July to 43.0 in August. This led to speculation that the Federal Reserve might stop raising interest rates, weakening the US dollar. Consequently, the GBP/USD pair benefited from these dynamics, recovering recent losses and continuing its upward trend above 1.2600.

US Economic Developments and Their Impact on the US Dollar and GBP/USD Pair

It's worth noting that the US markets are quiet due to the Labor Day holiday following a busy week of economic news. US Nonfarm Payrolls for August beat expectations at 187K, and the Unemployment Rate dropped to 3.8%. However, Average Hourly Earnings rose slightly less than expected at 0.2%. US Manufacturing PMI also improved. This has led to speculation that the Federal Reserve might stop raising interest rates, with markets now doubting a rate hike in September and reduced chances for November and December. Despite a modest weekly gain, the US Dollar remains in positive territory for the sixth consecutive week.

Hence, the news of better-than-expected US Nonfarm Payrolls and a potential pause in Federal Reserve rate hikes has put some pressure on the US Dollar, causing it to weaken slightly. This contributed to a positive move in the GBP/USD currency pair as the Pound (GBP) gained strength against the US Dollar on the expectation of a less hawkish Fed.

British Factories Struggle in August Amidst Economic Concerns

Elsewhere, the recent data revealed that British factories had a tough time in August, with their weakest performance since the COVID-19 pandemic began. In the meantime, orders dropped significantly due to higher interest rates, as the Manufacturing PMI fell from 45.3 in July to 43.0, staying below the 50 threshold for six months.

Traders now expect a 25 basis points rate hike in the upcoming meeting, driven by concerns about high inflation from BoE Chief Economist Huw Pill. However, this aggressive tightening by the Bank of England is worrying for the UK economy and is putting pressure on the British Pound.

This weak factory performance and concerns about the Bank's policy could negatively impact the GBP/USD currency pair, potentially causing its value to decline.

GBP/USD - Technical analysis

The GBP/USD pair has distinctly extended its downward movement, decisively surpassing our initial target of 1.2625 and settling beneath it. This move solidifies the dominance of the bearish trend both in intraday and short-term scenarios, following the evident bearish channel depicted on the chart. Our subsequent target is set at 1.2505. The projected trading boundaries for today are a support at 1.2500 and a resistance at 1.2660.

The EMA50 consistently reinforces the anticipated bearish momentum. This prediction stands as long as the pair doesn't breach the 1.2625 level and sustain above it.

Consequently, our analysis remains bearish for both the intraday and short-term, driven by the downward force exerted by the EMA50. A breach and a subsequent stabilization above 1.2625 could initiate potential recovery endeavors, with an initial aim at the 1.2625 zone.