Climb to 1.2400 Highly Likely


The pair will likely keep rising as bulls target the next key resistance level at 1.2400.

Bullish View

  • Set a buy-stop at 1.2292 and a take-profit at 1.2400.
  • Add a stop-loss at 1.2100.
  • Timeline: 2 days.

Bearish View

  • Set a sell-stop at 1.2163 and a take-profit at 1.2080.
  • Add a stop-loss at 1.2250.

The GBP/USD price jumped to the highest level since August 2nd after the latest American inflation data. It rose to a high of 1.2275, which was about 2.2% above the lowest level this month. It has risen by 5.2% from the year-to-date low.

US Dollar Pulls Back

The GBP/USD price continued its recovery in the overnight session as the market reflected on the latest American inflation data. The numbers revealed that consumer prices declined broadly helped by the falling gasoline prices.

Gas prices moved from a high of $5 in June to $4.03 in July as crude oil prices declined. West Texas Intermediate (WTI) has dropped from the year-to-date high of 135 to less than 105 in July. This is notable since gas prices have a strong part in broad inflation.

The headline consumer inflation dropped from 1.3% to 0.0% leading to a year-on-year gain of 8.5%. Inflation moved from the previous high of 9.1%. On the other hand, core inflation, which excludes the volatile food and energy prices, declined from 0.7% to 0.3%.

The US dollar index crashed by more than 1% to $104.2, which was substantially lower than the year-to-date high of $109.30. Similarly, the yield of the 10-year yield dropped to 2.79% while the 5-year dropped to 2.59%.

The next key catalyst for the GBP/USD pair will be the upcoming US producer price index (PPI) data. Economists expect the data to show that the headline PPI dropped from 11.3% to 10.4% in June. On a month-on-month basis, they expect that the PPI dropped from 1.1%.

Core PPI is expected to have dropped from 8.2% to 7.6%.  The GBP/USD pair will also react to the upcoming US GDP data scheduled for Friday.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD price bounced back after the latest US inflation data. It rose to a high of 1.2275, which was the highest level since August 2. On the four-hour chart, the pair rose to the first resistance point of the standard pivot point.

It also rose above the 25-day and 50-day moving averages while the MACD has continued rising. Therefore, the pair will likely keep rising as bulls target the next key resistance level at 1.2400.


Ready to trade our free Forex signals? Here are the best Forex brokers to choose from.


Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading in Contracts for Difference (‘CFDs’) carries a high level of risk and can result in the loss of all your investment. As such, CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever. For more information about the risks associated with trading CFDs please find and read our ‘Product Disclosure’.

Please recognize that this website is the only official website, please do not enter other clone websites through Internet search or advertisements.

© 2011 - 2024 All Rights Reserved.