The GBP/USD price has been in a bullish trend in the past few days. It managed to move above the important resistance level at 1.1500, which was the upper side of the ascending triangle pattern.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.1850.
• Add a stop-loss at 1.1500.
• Timeline: 1-2 days.

Bearish view

• Set a sell-stop at 1.1600 and a take-profit at 1.1500.
• Add a stop-loss at 1.1700.

The GBP/USD price rallied to the highest level since September 13 as the US dollar sell-off continued. It rose to a high of 1.1650, which was about 12% above the lowest level in September.
 

US dollar retreats

The GBP/USD price continued rising as the US dollar index continued slipping. The US dollar index fell by more than 1.12% and to $109.50, which was sharply lower than this month’s high of $115. It has fallen by over 3% this week alone.

The US dollar has plunged this week as investors bet on a potential Fed pivot. Several Fed officials have hinted that the bank will start deliberating the pace of rate hikes in the coming months. As a result, most analysts expect that the bank will hike interest rates by 0.75% in November followed by a smaller one in December.

Inflation expectations signal that a Fed pivot could be premature. The closely watched 5-year, 5-year forward inflation expectation rate rose to 2.46%, the highest level since June of this year. Another figure by the New York Fed showed that consumers expect inflation will remain high over the long term.

The GBP/USD also rallied as the market reflected on the new Rishi Sunak administration. He has pledged to be more fiscally responsible than Truss. This explains why the British pound and UK stocks have risen while bond yields have retreated in the past few days.

The pair will next react to the latest American GDP data that will come out in the afternoon. The data is expected to show that the American economy grew by 2.4% in the third quarter after contracting in the past two-quarters straight. This expansion will likely be because of higher consumer spending despite the rising inflation.
 

GBP/USD forecast

The GBP/USD price has been in a bullish trend in the past few days. It managed to move above the important resistance level at 1.1500, which was the upper side of the ascending triangle pattern. The pair also rose to the second resistance of the standard pivot point. It also rose above the 25-day and 50-day moving averages.

The Stochastic Oscillator has moved above the overbought level. Therefore, the pair will likely continue rising as buyers target the third resistance at 1.1850. The stop-loss for this trade will be at 1.1500.

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