Bearish View
Bullish View
The GBP/USD pair rose slightly as traders prepared for the last busy week for the UK and the US of the year. It was trading at 1.2690, a few points above last Friday’s low of 1.2600. It remains down by 5.56% from its highest level this year.
BoE and Federal Reserve Decisions will have a busy week as traders receive crucial economic data and the central banks deliver their decisions.The first key UK data will come out on Tuesday when the Office of National Statistics (ONS) releases the latest jobs numbers. Economists polled by Reuters expect the data to show that the unemployment rate remained unchanged at 4.3% in October.They also expect the average earnings ex-bonus to move to 5.0% from the previous 4.8%. While the labor market numbers are important, their impact on the GBP/USD pair will be muted as traders wait for Wednesday’s inflation data.The other data to watch will be the upcoming US retail sales data. Economists expect these numbers to show that the headline sales rose from 0.4% in October to 0.6% in November. They also see the core sales rising from 0.1% to 0.4%.If these numbers are accurate, they will signal that the economy is doing relatively well. Historically, retail sales are some of the best indicators of the health of an economy because consumer spending is the biggest component of the GDP.The main catalysts for the GBP/USD pair will be the upcoming Bank of England and Federal Reserve interest rate decisions. Economists expect the two banks to cut interest rates by 0.25%, continuing a trend that started a few months ago.
GBP/USD Technical AnalysisThe daily chart shows that the GBP/USD pair has been in a strong downtrend in the past few months. It has formed a bearish flag chart pattern, a popular bearish sign that will lead to more downside.The pair has moved below the 50% Fibonacci Retracement point at 1.2740. Also, the MACD indicator has dropped below the zero line, while the Relative Strength Index (RSI) has moved below 50.Therefore, the pair will likely have a bearish breakdown as traders target the key support at 1.2490, the lower side of the flag.More By This Author:Bitcoin Price Prediction: The Long-Term Bullish Case For BTCEUR/USD Forex Signal: Drops Before ECB DecisionBTC/USD Forex Signal: Bitcoin Rally Hits A Barrier
