The pair will likely keep rising as buyers target the key resistance point at 1.2160, which was the lowest point on May 12th.
- Buy the GBP/USD pair and set a take-profit at 1.2160.
- Add a stop-loss at 1.1935.
- Timeline: 1-2 days.
- Set a sell-stop at 1.1970 and a take-profit at 1.1900.
- Add a stop-loss at 1.2050.
The GBP/USD currency pair held relatively steady after Andrew Bailey, the BoE governor reiterated that the committee will consider a 0.50% rate hike. The pair also rose after the positive jobs data from the UK. It is trading at 1.2050, which is about 2.15% above the lowest level this month.
UK Inflation Data Ahead
The British pound maintained its bullish trend after the UK published strong jobs numbers. According to the Office of National Statistics (ONS), the country’s unemployment rate remained unchanged at 3.8%. Wages continued rising by more than 6% as the economy added over 220k jobs in the three months to May.
The next key driver for the GBP/USD pair will be the upcoming UK consumer and producer inflation data. Like all countries, analysts believe that the country saw elevated inflation in June as the cost of food and energy surged.
According to Reuters, economists expect that the country’s inflation rose from 9.1% in May to 9.3% in June. If they are accurate, this will be the biggest inflation figure in more than three decades.
Excluding the volatile food and energy products, analysts expect that the country’s inflation retreated from 5.9% to 5.8%. These numbers will be substantially higher than the Bank of England’s target of 2.0%.
The ONS will also publish the latest producer price index (PPI). Economists believe that these numbers continued rising as the cost of doing business remained at elevated levels. They see the PPI input and output rising to 23.2% and 16%, respectively.
These numbers will come a day after BoE’s Andrew Bailey said that the bank will consider hiking interest rates by 0.50% in August. Other central banks such as those from the US, Canada, and Australia have all hiked rates by 0.50% this year.
The GBP/USD pair has been in a bullish trend as the US dollar rally fades. The three-hour chart shows that the pair managed to move above the descending channel shown in red. It also rose above the important support at 1.1936, which was the lowest level on June 14th. The pair also managed to retest this level on Tuesday.
Most importantly, the 25-period and 50-period moving averages have made a bullish crossover. Therefore, the pair will likely keep rising as buyers target the key resistance point at 1.2160, which was the lowest point on May 12th.
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