In today's forex market, GBPUSD traders are closely monitoring the release of key economic data, particularly the Consumer Price Index (CPI) figures. Economists anticipate a slowdown in both monthly and yearly US CPI metrics, with forecasts indicating a decrease from previous levels. Specifically, CPI Year-on-Year (YOY) is expected to dip to 2.9% from the previous 3.4%, while CPI Month-on-Month (MOM) is forecasted to decline to 0.2% from 0.3%.
Turning our attention to the GBPUSD hourly chart, recent price action reveals a retracement of approximately 50% of the preceding bearish rally. Interestingly, rather than signaling a continuation of the bearish trend, the price is forming an ascending triangle chart pattern. This pattern typically suggests a bullish continuation, with prices expected to break above the triangle formation and potentially target the 1.2700 level.
Examining the Exponential Moving Averages (EMAs), we observe that the EMA 50 is gradually converging towards the EMA 200, hinting at a potential golden cross formation. This convergence signals a diminishing bearish momentum and hints at a shift in favor of the bulls.
The Bollinger Bands further reflect the current market dynamics, with both bands expanding as prices trade above the upper band. This indicates heightened volatility driven by bullish sentiment. Additionally, the middle band of the Bollinger Bands may serve as a support level during upward price movements.
Oscillator indicators, including the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), align with the bullish outlook. The MACD signal line remains above the zero line, while the RSI hovers above the 50% level, confirming the prevailing bullish sentiment.
In summary, GBPUSD traders are poised for potential upside movement, contingent upon the accuracy of economists' forecasts on the US CPI. As the market awaits the US CPI data release, market participants will monitor price action closely for further insights into GBPUSD's trajectory.
Forecast 0.3% vs Previous 0.3%
Forecast 2.9% vs Previous 3.4%
Forecast 0.2% vs Previous 0.3%
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