The pair will likely continue falling as sellers target the next key support level at 1.100.
Sell the GBP/USD pair and set a take-profit at 1.100.Add a stop-loss at 1.1200.Timeline: 1-2 days.
Set a buy-stop at 1.1170 and a take-profit at 1.1250.Add a stop-loss at 1.1050.
The GBP/USD price remained under intense pressure ahead of important economic data from the United Kingdom (UK) and the US. It dropped to a low of 1.1100, which was about 3.5% below the highest level last week.
UK data dump ahead
The GBP/USD continued dropping on Monday as the market reflected on the strong American jobs data. According to the Bureau of Labor Statistics, the economy’s job market was still strong although signs of easing were emerging. The economy added over 263k jobs in September while the unemployment rate dropped to 3.5%.
The job additions were smaller than the previous month’s increase of 315k. They were also much lower than this year’s monthly increase of 420k. Additional data published last week revealed that the country’s initial jobless claims rose in the previous week.
Still, analysts expect that the Federal Reserve will continue hiking interest rates in the coming months. Several Fed speakers like Mary Daly, Charles Evans, and Raphael Bostic said that the bank will continue hiking rates until signs of inflation slowdown continued.
Therefore, the GBP/USD price will react to the upcoming Fed minutes and US inflation numbers scheduled for Wednesday. The US will also publish the latest retail sales on Friday. Analysts expect the data to show that sales rose by 0.2% in September.
The GBP/USD price will next react to the upcoming data dump from the UK. On Tuesday, the Office of National Statistics (ONS) will publish the latest jobs numbers. Economists expect the data to show that the unemployment rate remained at 3.6% in August. Average earnings plus bonus are expected to have risen by 5.9%.
The other important data to watch will be the latest UK GDP, manufacturing, and industrial production data that will come out on Wednesday.
On the 4H chart, we see that the GBP/USD price has been in a strong bearish trend in the past few days. In this period, it managed to move below the important level at 1.1358, which was the lowest level on September 19. It has fallen below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) dropped below the key level at 50.
The pair will likely continue falling as sellers target the next key support level at 1.100. A move above the resistance at 1.1200 will invalidate the bearish view.