GBP/USD Forex Signal: Range-Bound Ahead of US Data - DailyForex.com
Buy the GBP/USD and add a take-profit at 1.3350.
Add a stop-loss at 1.3150.
Timeline: 1-2 days.
Set a sell-stop at 1.3220 and add a take-profit at 1.3160.
Add a stop-loss at 1.3300.
The GBP/USD moved sideways as investors reflected on the rising number of Omicron cases and the measures by the US and UK governments. The pair is also moving sideways ahead of the latest US consumer confidence and UK and GDP data. It is trading at 1.3250, which is above the key support at 1.3195.
Covid Concerns Remain
The Bank of England (BOE) met last week and sounded relatively hawkish. The bank surprised investors by hiking interest rates by 0.25% and hinted that more hikes will come in the coming year. It justified the rate hike by arguing that it was necessary to curb the rising inflation.
A few days after the first pandemic-era rate hike, there are concerns that the UK economy could experience a major slowdown. These concerns are mostly because of the rising number of Covid-19 cases in the UK.
The most recent data showed that the country had more than 91,000 cases on Monday. As such, there are concerns that the Boris Johnson administration will move to announce fresh lockdowns after Christmas. According to the Telegraph, the government is considering £6,000 grants to businesses affected by the new restrictions.
In the morning session, the UK will publish the latest UK GDP data. Economists expect the data to show that the country’s economy expanded by 1.3% in the third quarter. This growth translated to an annualized growth of 6.6%. These estimates are based on the past two releases by the Office of National Statistics (ONS).
The GBP/USD pair will also react to the final estimate of US GDP numbers that will come out in the afternoon session. Based on the November estimates, economists expect the data to show that the economy expanded by 2.1% in the third quarter. The Conference Board will also publish the latest consumer confidence data.
The four-hour chart shows that the GBP/USD pair has been in a tight range in the past few days. The chart shows that the pair has found a strong support at 1.3195. The pair is trading along the 25-day moving average. It is also between the middle line of the Bollinger Bands while the Relative Strength Index (RSI) has moved to the neutral level of 50.
Therefore, the pair will likely remain in this range today. The key levels to watch will be the support at 1.3195 and the resistance at 1.3350.