Daily Price Outlook

The GBP/USD pair exhibits an intensified bearish momentum, methodically nearing our anticipated target of 1.2200. We anticipate this downward trajectory to persist, with subsequent objectives set around the 1.2135 mark.

The EMA50 consistently underpins the projected bearish trend, which unfolds systematically within the bearish channel depicted on the chart. It's imperative to note that surpassing 1.2310 would negate this bearish outlook, prompting the pair to undergo an intraday bullish realignment.

For today, the projected trading parameters are established between a support at 1.2150 and a resistance at 1.2300.

GBP/USD - Trade Idea 

Entry Price – Sell Below 1.22581

Take Profit – 1.21951

Stop Loss – 1.22876

Risk to Reward – 1: 2

Profit & Loss Per Standard Lot = +$630/ -$295

Profit & Loss Per Micro Lot = +$63/ -$29

Daily Price Outlook

Yesterday, the GBP/USD pair exhibited a pronounced bearish behavior, reaching our extended target of 1.2255. Subsequently, it attempted a retest of the resistance at 1.2310, which it had previously breached. Notably, the stochastic indicator has displayed a diminishing bullish momentum, suggesting a potential push for the price to continue its primary bearish course with an upcoming target set at 1.2200.

Given this context, we anticipate a continuation of the bearish trajectory for the foreseeable future, contingent on the price remaining below 1.2310. It's essential to highlight that the EMA50 continues to bolster the current bearish trend within the discernible bearish channel on the chart. Today's anticipated trading range spans from a support level at 1.2190 to a resistance level at 1.2350.

GBP/USD - Trade Idea 

Entry Price – Sell Limit 1.23304

Take Profit – 1.22366

Stop Loss – 1.23854

Risk to Reward – 1: 1.7

Profit & Loss Per Standard Lot = +$938/ -$550

Profit & Loss Per Micro Lot = +$93/ -$55

Daily Price Outlook

During the European trading session, the GBP/USD currency pair has failed to stop its downward rally, experiencing a 0.35% decline, placing it at 1.2250. Despite a minor bounce from the 1.2230 region, near a six-month low, the pair struggles to gain momentum. But, the persistent bearish trend suggests potential challenges for the pound against the US dollar in the near term.

Fed's Hawkish Stance and US Dollar Impact on GBP/USD

The broad-based US dollar remains near its highest level since June, propelled by the Federal Reserve's hawkish stance. However, this dollar's strength was seen as a challenging factor for the GBP/USD currency pair. However, the Fed opted to maintain rates at a 22-year peak, between 5.25% and 5.50%, as anticipated. Furthermore, they hinted at a potential rate hike by year-end due to persistent inflation.

It is worth mentioning that the Fed's 'dot-plot' indicates a benchmark rate of 5.1% next year, signaling fewer rate cuts in 2024 than previously projected. Rising US Treasury bond yields raise economic concerns, reducing appetite for riskier assets and impacting GBP/USD.

Surprise BoE Decision Adds Pressure on British Pound

Aside from that, the British Pound faced more pressure after the surprise decision by the Bank of England (BoE) to keep the benchmark interest rate steady at 5.25%. The BoE chose to keep the benchmark interest rate unchanged at 5.25%, contrary to expectations of a 0.25% increase to 5.50%. This surprising move came as inflation slowed, the UK labor market cooled, and concerns of a looming recession emerged. It marked the first time since December 2021 that the BoE didn't raise rates and even revised down its growth forecast for July-September to just 0.1% from the previous 0.4%. This unexpected pause weighed on the Pound and contributed to the GBP/USD pair losses.

GBP/USD - Technical Analysis

Yesterday, the GBP/USD pair exhibited a pronounced bearish behavior, reaching our extended target of 1.2255. Subsequently, it attempted a retest of the resistance at 1.2310, which it had previously breached. Notably, the stochastic indicator has displayed a diminishing bullish momentum, suggesting a potential push for the price to continue its primary bearish course with an upcoming target set at 1.2200.

Given this context, we anticipate a continuation of the bearish trajectory for the foreseeable future, contingent on the price remaining below 1.2310. It's essential to highlight that the EMA50 continues to bolster the current bearish trend within the discernible bearish channel on the chart. Today's anticipated trading range spans from a support level at 1.2190 to a resistance level at 1.2350.

Daily Price Outlook

The GBP/USD currency pair has struggled to break its downward momentum, continuing its descent below the crucial 1.2300 support level. This decline has persisted for two consecutive days and currently stands at its lowest point since early June. However, the main reason for this decline is the strength of the US Dollar. Following the Federal Reserve's recent FOMC meeting, the US Dollar staged an impressive rebound and is now approaching a six-month high. This resurgence in the US Dollar's value is exerting substantial pressure on the GBP/USD pair. In simpler terms, the robust US Dollar is causing the British Pound (GBP) to weaken within this currency pair.

Notably, the Federal Reserve's more hawkish stance is contributing to the USD's strength, and there are also expectations of the Bank of England (BoE) pausing its interest rate hikes, which adds to the downward pressure.

Fed's Interest Rate Decision and USD Outlook

As expected, the Federal Reserve decided to keep interest rates unchanged. However, they still have plans for rates to reach between 5.5% and 5.75% this year, with the possibility of one more 0.25% increase in 2023. They've also adjusted their outlook for next year, now anticipating a rate of 5.1%, which is a change from their previous projection of four rate cuts in 2024 to just two. Hence, the "higher-for-longer" approach, keeping US Treasury bond yields elevated, is boosting the appeal of the US Dollar as a safe-haven currency. Alongside cautious market sentiment, this is diminishing interest in riskier assets.

Market Factors and Outlook: GBP/USD Dynamics

Furthermore, the British Pound is facing pressure due to expectations of the Bank of England (BoE) pausing its interest rate hikes. As a result, this is pushing down the value of the GBP/USD pair. Another factor putting pressure on the GBP/USD currency pair is the unexpected drop in the UK's annual inflation rate (CPI) from 6.8% in July to 6.7% in August, defying expectations of a rise to 7%. This decline also affected the core CPI, which excludes volatile items, dropping from 6.9% in July to 6.2% in August. These figures align with concerns of a potential economic recession and signs of a cooling job market in the UK, reinforcing market expectations. As a result, all eyes are on the Bank of England's upcoming interest rate decision, scheduled for later this week.

Looking forward, traders will be watching important US economic data like Initial Weekly Jobless Claims, the Philly Fed Manufacturing Index, and Existing Home Sales. These, along with US bond yields and overall market sentiment, could affect the value of the US Dollar and potentially impact the GBP/USD pair.

GBP/USD - Technical Analysis

The GBP/USD pair has successfully met our primary anticipated target at 1.2310 and is exhibiting a negative bias around this level. This enhances the probability of persisting bearish momentum, potentially descending further to targets of 1.2255 and subsequently 1.2200.

The prevalent bearish channel orchestrates the anticipated downtrend, receiving consistent reinforcement from the EMA50. It's crucial to note that any inability to breach the 1.2310 level may instigate a price rebound, giving rise to a short-term bullish trend aiming to test the 1.2435 regions. For today's trading, we anticipate boundaries ranging from a support at 1.2210 to a resistance at 1.2370.

Daily Price Outlook

The GBP/USD pair has successfully met our primary anticipated target at 1.2310 and is exhibiting a negative bias around this level. This enhances the probability of persisting bearish momentum, potentially descending further to targets of 1.2255 and subsequently 1.2200.

The prevalent bearish channel orchestrates the anticipated downtrend, receiving consistent reinforcement from the EMA50. It's crucial to note that any inability to breach the 1.2310 level may instigate a price rebound, giving rise to a short-term bullish trend aiming to test the 1.2435 regions. For today's trading, we anticipate boundaries ranging from a support at 1.2210 to a resistance at 1.2370.

GBP/USD - Trade Idea 

Entry Price – Sell Limit 1.23489

Take Profit – 1.22529

Stop Loss – 1.24310

Risk to Reward – 1: 1.7

Profit & Loss Per Standard Lot = +$960/ -$821

Profit & Loss Per Micro Lot = +$96/ -$82

Daily Price Outlook

The GBP/USD currency pair remains anchored around the 1.2400 mark, consistently positioning below it. The EMA50 exerts ongoing downward pressure on the price, suggesting a potential resumption of the prevailing bearish momentum, targeting the significant 1.2310 level next.

The established bearish channel affirms the longer-term bearish trajectory, aiming for objectives below the aforementioned level. It's pivotal to note that a breach of the 1.2435 threshold would pivot the pair's direction upwards intraday, potentially reaching 1.2505 before encountering further bearish challenges.

Today's trading parameters are projected to span from a support at 1.2300 to a resistance boundary at 1.2445.

GBP/USD - Trade Idea 

Entry Price – Sell Limit 1.23727

Take Profit – 1.23079

Stop Loss – 1.24257

Risk to Reward – 1: 1.2

Profit & Loss Per Standard Lot = +$648/ -$530

Profit & Loss Per Micro Lot = +$64/ -$53

Daily Price Outlook

The GBP/USD pair failed to stop its losing streak and remained well offered around 1.2345 level as the UK's Consumer Price Index (CPI) report for August was lower than expected, dampening the Pound Sterling's appeal. Investors anticipated a higher CPI due to rising energy prices but were surprised by the soft report. This led to a significant decrease in the Pound's value against the US Dollar. Core inflation also slowed down noticeably, showing reduced demand for everyday items. Additionally, the UK's Producer Price Index (PPI) for core output shrank in August, revealing that producers were less confident about demand as high inflation squeezed household incomes.

UK Inflation Data & GBP/USD Reaction; Focus on BoE Meeting

According to the UK's Office for National Statistics (ONS), the country's annual inflation, as measured by the Consumer Price Index (CPI), increased by 6.7% in August, slightly down from July's 6.8%. This was lower than the expected 7.1% rise. Core CPI, excluding volatile items, rose by 6.2% year-on-year, missing the estimated 6.8%. The Services CPI increased by 6.8%, lower than July's 7.4%. Food and accommodation services had the most significant impact on lowering the CPI.

The UK Finance Minister, Jeremy Hunt, mentioned that their plan to tackle inflation is showing progress, although inflation remains too high. Following the CPI data, the GBP/USD pair dropped around 40 pips to reach below 1.2350, a multi-month low.

Meanwhile, the immediate market impact is likely to be limited because everyone's attention is on the Bank of England (BoE) meeting this Thursday. However, the chances of aggressive policy tightening seem to be diminishing. BoE Governor Andrew Bailey recently suggested they're nearing the end of interest rate hikes. In the meantimel, the concerns about a potential recession and a cooling UK job market could prompt the BoE to pause rate hikes, capping potential gains for the GBP/USD pair.

FOMC Policy Decision Awaited: Impact on GBP/USD

Besides that, investors are awaiting the FOMC policy decision to be announced during the US session. The Federal Reserve (Fed) is likely to maintain current interest rates, but there's market anticipation of a possible 25 bps increase later this year. Analysts will closely watch Fed Chair Jerome Powell's post-meeting remarks and the monetary policy statement for insights on future rate hikes, affecting the USD and providing new momentum for the GBP/USD pair.

GBP/USD - Technical Analysis

The GBP/USD currency pair remains anchored around the 1.2400 mark, consistently positioning below it. The EMA50 exerts ongoing downward pressure on the price, suggesting a potential resumption of the prevailing bearish momentum, targeting the significant 1.2310 level next.

The established bearish channel affirms the longer-term bearish trajectory, aiming for objectives below the aforementioned level. It's pivotal to note that a breach of the 1.2435 threshold would pivot the pair's direction upwards intraday, potentially reaching 1.2505 before encountering further bearish challenges.

Today's trading parameters are projected to span from a support at 1.2300 to a resistance boundary at 1.2445.

Daily Price Outlook

The GBP/USD pair has reaffirmed its downward trajectory, consolidating beneath the 1.2400 threshold. This strengthens the forecast for an ongoing primary bearish trend, paving the way towards our primary anticipated target of 1.2310.

The current bearish channel meticulously frames the projected downtrend, which receives consistent reinforcement from the EMA50. It's important to highlight that a breach of 1.2435 could propel the price towards challenging the crucial resistance at 1.2505 before embarking on another bearish maneuver. Today's anticipated trading parameters are set between a support of 1.2300 and resistance at 1.2450.

GBP/USD - Trade Idea 

Entry Price – Buy Limit 1.23798

Take Profit – 1.24463

Stop Loss – 1.23398

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$665/ -$400

Profit & Loss Per Micro Lot = +$66/ -$40

Daily Price Outlook

The GBP/USD currency pair failed to stop its declining streak and experienced a two-day decline, trading around 1.2380 during the European session on Monday. However, this decline is driven by upcoming interest rate decisions in the US and the UK, which are making traders cautious. In the US, the Federal Reserve is expected to maintain current interest rates in its upcoming meeting, but there is a possibility of slight rate increases later in 2023, strengthening the US dollar (USD) and putting pressure on GBP/USD.

Conversely, the Bank of England (BoE) is anticipated to raise UK interest rates slightly in its upcoming meeting, potentially boosting the British pound (GBP) while also introducing market uncertainty.

Influence of Central Banks and Economic Data on GBP/USD

It is worth noting that the US Federal Reserve (Fed) is likely to keep interest rates unchanged in its upcoming meeting on Wednesday. Investors are keenly watching for any hints about future rate changes. However, the market is currently factoring in a 0.25% rate increase by the end of 2023. Although, the USD faced some pressure due to disappointing US consumer sentiment data. The preliminary Michigan Consumer Sentiment Index for September was 67.7, lower than the previous 69.5 and the expected 69.1.

Hence, the news of the likely unchanged interest rates from the US Federal Reserve and the weaker US consumer sentiment data have the potential to put downward pressure on the USD, which could support the GBP/USD pair.

Factors Affecting GBP/USD Traders

Another factor influencing GBP/USD traders is the expectation that the Bank of England (BoE) will raise interest rates by 0.25% in its upcoming Thursday meeting. The BoE aims to combat rising inflation and maintain UK economic stability. However, BoE Governor Andrew Bailey's recent statement suggests that the bank may be nearing the end of its rate-hike cycle.

This, coupled with concerns about a potential recession and signs of a slowing UK job market, might push the BoE to reconsider future rate hikes. Investors will also closely monitor key economic data like the Consumer Price Index (CPI), Core CPI, and Producer Price Index (PPI) for August, set to be released on Wednesday.

Looking forward, traders will keep a close eye on US Building Permits data. These releases could provide trading opportunities within the GBP/USD pair, as they offer insights into the US housing market's health and can influence currency movements.

GBP/USD - Technical Analysis

The GBP/USD pair has reaffirmed its downward trajectory, consolidating beneath the 1.2400 threshold. This strengthens the forecast for an ongoing primary bearish trend, paving the way towards our primary anticipated target of 1.2310.

The current bearish channel meticulously frames the projected downtrend, which receives consistent reinforcement from the EMA50. It's important to highlight that a breach of 1.2435 could propel the price towards challenging the crucial resistance at 1.2505 before embarking on another bearish maneuver. Today's anticipated trading parameters are set between a support of 1.2300 and resistance at 1.2450.

Daily Price Outlook

The GBP/USD pair is holding steady in a tight range near 1.2490. It's struggling to break above the 1.2500 mark due to upcoming US economic data. However, the pair's recent decline can be attributed to a mix of factors, including downbeat UK data and a strong US dollar.

Challenges in UK Economy and BoE's Caution

The UK's unemployment rate rose to 4.3% from 4.2%, with 207,000 job losses in July, causing concerns about a recession. Despite this, the Bank of England worries about high wages fueling inflation, as earnings grew by 8.5%. The GDP unexpectedly shrank by 0.5% in July. A BoE policymaker, Catherine Mann, believes it's too early to stop raising interest rates, but this stance is worrying investors and putting pressure on the British Pound (GBP), affecting its exchange rate with the US Dollar (USD).

US Inflation Surges in August, Impact on Fed's Decision

Apart from this, the US Bureau of Labor Statistics reported in August the highest monthly inflation increase in 14 months. The Consumer Price Index (CPI) rose by 0.6% from the previous month, exceeding expectations, and showed an annual increase of 3.7%. The core CPI, excluding food and energy prices, also increased by 0.3% month-on-month, with an annual rise of 4.3%.

While many expect the Federal Reserve (Fed) to keep interest rates unchanged at the upcoming FOMC meeting, these numbers indicate that the Fed should stay alert to the possibility of inflation picking up in the coming months. Currently, there's a 97% probability of no rate change in September, but there's a 49.2% chance of a rate hike in November, according to the CME Fedwatch Tool.

Thus, the rising US inflation and the potential for future interest rate hikes has put upward pressure on the US Dollar (USD) against the British Pound (GBP). This has led to a decline in the GBP/USD currency pair as investors seek the strength of the USD.

Market Outlook for GBP/USD Amid Upcoming US Data

Looking forward, with no UK economic data on Wednesday, the GBP/USD pair will be influenced by USD movements. Traders await US data like weekly Initial Jobless Claims, the Producer Price Index (PPI), and monthly Retail Sales. On Friday, the preliminary Michigan Consumer Sentiment Index for September will be key. These releases may guide GBP/USD trading.

GBP/USD - Technical Analysis

The GBP/USD pair experienced a pronounced downtrend yesterday, successfully reaching our anticipated target of 1.2400 and currently hovering around this mark. We anticipate further potential decline, with the next significant target positioned at 1.2310.

This bearish outlook remains dominant, reinforced by the EMA50 which exerts downward pressure on the price. It's imperative to note that for the bearish momentum to persist, the price should remain below 1.2505. Today's projected trading range lies between a support level of 1.2320 and a resistance level of 1.2480.