The GBP/USD pair also retreated after data from the UK showed that the labor market was softening.
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- Buy the GBP/USD pair and set a take-profit at 1.2260.
- Add a stop-loss at 1.2130.
- Timeline: 1 day.
- Set a sell-stop at 1.2160 and a take-profit at 1.2100.
- Add a stop-loss at 1.2260.
The GBP/USD remained under pressure after the UK published soft jobs numbers. It retreated to a low of 1.2128, down from this month’s high of 1.2335. The focus shifts to the upcoming UK Consumer Price Index (CPI) and US housing and building permits data.
The GBP/USD pair retreated after the US published strong retail sales data. According to the Commerce Department, retail sales rose by 0.7% in September while core sales jumped by 0.6%. The two increases were better than the median estimates of 0.3% and 0.2%, respectively.
Additional data showed that the country’s industrial and manufacturing production rose by 0.4% and 0.3%, respectively. These numbers, coupled with last week’s strong US inflation data mean that the Fed will likely sound hawkish in the next meeting.
Several Fed officials like Christopher Waller, James Harker, and Michele Bowman are scheduled to talk on Wednesday. They will likely provide their views about the economy and what to expect in the coming meetings.
The Fed will also publish its Beige Book, which provides more information about the economy from the bank’s regional officials. The US will also publish the latest housing starts and building permits data.
The GBP/USD pair also retreated after data from the UK showed that the labor market was softening. According to the Office of National Statistics (ONS) revealed that the average earnings index dropped from 8.5% to 8.1%. Excluding bonuses, wages dropped to 7.8%.
The next important catalyst for the pair will be the upcoming UK consumer inflation data. Economists expect the data to show that the headline inflation slipped from 6.7% in August to 6.5%. Core inflation is also expected to come in at 6.5%.
These numbers will provide more signs of what to expect in the coming Bank of England (BoE) meeting.
The GBP/USD exchange rate slipped to 1.2130 on Tuesday after the relatively weak UK jobs numbers. This was an important level since it was the lowest point on Friday. It has formed a small double-top pattern whose neckline is at 1.2220. The pair is stuck at the 50-period ALMA indicator.
The outlook for the pair is mildly bullish because of the double-bottom pattern. If this happens, it will likely rise and retest the resistance at 1.2260. A break below the small double-bottom at 1.2130 will point to more downside.
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