The GBP/USD pair will be affected by the upcoming minutes of the Federal Reserve.
Sell the GBP/USD pair and set a take-profit at 1.0780.Set a stop-loss at 1.1200.Timeline: 1-2 days.
Set a take-profit at 1.1160 and a take-profit at 1.1300.Add a stop-loss at 1.1050.
The GBP/USD price moved sideways ahead of the upcoming UK GDP data. It was trading at 1.1116, which was much higher than this week’s low of 1.1015. This price is lower than last week’s high of 1.1500.
UK GDP data ahead
The GBP/USD price remained unchanged after the latest UK employment numbers. The unemployment rate dropped from 3.6% to 3.5% in August. This decline was better than the median estimate of 3.6%. Additional data showed that average hourly earnings increased from 5.2% to 5.4%. Including bonuses, wages rose from 5.5% to 6.0%.
The next key catalyst for the pair will be the upcoming UK GDP data. Analysts expect the data to show that the economy dropped from 4.4% to 2.2% in August. Those polled by Reuters expect that the manufacturing and industrial production dropped to 0.8% and 0.6%, respectively.
The Office of National Statistics (ONS) will also publish the latest construcion output and trade statistics data. On trade, analysts believe that the trade deficit rose to over 20.4 billion pounds in August.
Meanwhile, the Bank of England (BoE) staged its second emergency intervention as concern about the UK economy continued. The bank widend its 65 billion pound gilts purchasing program to include inflation-linked bonds.
It also said that it was prepared to buy 5 billion pounds per day in index-linked to UK bonds.Still, the strain in the bond market continued as the standard 30-year UK government bond rose to 4.83%.
The GBP/USD pair will be affected by the upcoming minutes of the Federal Reserve. These minutes, which will come out later today, are expected to show that most officials expect to continue hiking interest rates in the coming months. The US will publish the latest consumer inflation data on Thursday.
The GBP/USD remained under pressure in the overnight session. It has moved slightly below 50-day moving average and the important resistance level at 1.1358. The moving average convergence divergence (MACD) moved below the neutral point. At the same time, the Relative Strength Index (RSI) has tilted lower.
Therefore, the pair will likely continue falling as sellers target the next key support level at 1.0780, which was the lowest point on September 29. A move above the resistance at 1.1300 will invalidate the bearish view.