Bearish view
Sell the GBP/USD pair and set a take-profit at 1.3150.
Add a stop-loss at 1.3325.
Timeline: 1-2 days.
Bullish view
Buy the GBP/USD pair and set a take-profit at 1.3325.
Add a stop-loss at 1.3150
GBP/USD exchange rate remains under pressure as tensions between the US and Iran escalated during the weekend and as traders waited for important macro data. It slipped to a low of 1.3206, its lowest level since June 29, and much lower than the August high of 1.3677.
US Consumer Confidence and Jobs Data
Unlike last week, this one will have some major events that will have an impact on the US dollar. One of these is the ongoing tensions between the United States and Iran. Iran submitted a seven-point plan last week, which Trump rejected and signaled that he will resume his bombing campaign after the midterm elections.
As a result, crude oil prices resumed rising on Monday morning, with Brent rising above $103.50. The West Texas Intermediate (WTI) has jumped to $93, while US gasoline and diesel prices have continued soaring. Diesel, which is used to transport everything, jumped to a record high, meaning that inflation will remain at an elevated level.
There will be some major macro numbers and speeches from some key Federal Reserve officials, including Lisa Cook, Tom Barkin, Austan Goolsbee, and Christopher Waller. These officials will provide more hints on the state of the economy and what to expect later this year.
The GBP/USD pair will also react to the US jobs numbers. ADP will publish its private jobs numbers, which are expected to show that the sector created over 70k jobs this month after adding 38k last month. The Bureau of Labor Statistics (BLS) will publish the official nonfarm payrolls data.
Some of the most important data to watch this week will be the US consumer confidence, housing price index, and GDP. All these numbers will be important because they will provide more information on what to expect from the Fed.
GBP/USD Technical Analysis
The daily chart shows that the GBP/USD pair has slumped in the past few weeks as the US dollar index has soared. It dropped from 1.3677 in August to the current 1.3240, slightly lower than the key support level of 1.3276, its lowest level on July 28.
The pair has moved to the Ultimate Support level of Murrey Math Lines tool. At the same time, sterling has remained below the 50-day moving average, while the Relative Strength Index (RSI) has dropped to the oversold level.
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