The GBP/USD pair has held steady in the past few weeks.
Forex Brokers We Recommend in Your Region
- Buy the GBP/USD pair and set a take-profit at 1.2600.
- Add a stop-loss at 1.2450.
- Timeline: 1-2 days.
- Set a sell-stop at 1.2500 and a take-profit at 1.2400.
- Add a stop-loss at 1.2600.
The GBP/USD exchange rate is hovering near its highest point since mid-September ahead of the coming FOMC minutes and UK autumn statement. It continued its uptrend and was trading at the psychologically-important level of 1.2500, which is about 3.85% above the lowest point this year.
The GBP/USD pair has done well in the past few weeks, helped by the relatively weaker US dollar. The dollar index (DXY) retreated to a low of $103.41, the lowest level since September 1st. It has retreated by over 3.65% from its highest level this year.
The pair’s rally coincided with the recent price of crude oil. Brent, the global benchmark, rose by over 2.80% to $82.80 while the West Texas Intermediate (WTI) rose by 3% to $78.33. Most analysts believe that the OPEC+ cartel will decide to slash oil production in the coming months.
Crude oil is an important part of the economy because of its impact on inflation and central banks. Recent data from the UK and US showed that inflation continued falling in October as energy prices retreated.
The next important catalyst for the GBP/USD pair will be the upcoming statements by key members of the Bank of England (BoE). Andrew Bailey, the head of the BoE, and Hugh Pill, the Chief Economist will talk.
In its most recent decision, the BoE decided to leave interest rates unchanged and warned that they will remain in this stage for a while.
The other crucial GBP/USD news will be the upcoming UK autumn statement by Jeremy Hunt. In a statement on Monday, Prime Minister Rishi Sunak, said that the government would start cutting rates in due time now that inflation has halved.
The Federal Reserve will also publish minutes of the last meeting. These minutes will provide more information about what to expect in the coming meetings.
The GBP/USD pair has held steady in the past few weeks. It has now moved above the 38.2% Fibonacci Retracement level. The pair has also formed an inverse head and shoulders pattern, which is a bullish sign.
Also, it remains above the 25-period and 50-period Arnaud Legoux Moving Averages (ALMA). It is now approaching the upper side of the ascending channel. Therefore, more gains will be confirmed if it moves above the upper side of this channel. If this happens, it will move to the 50% retracement point at 1.2595.