GBP/USD Forecast: Impact of Recent Inflation Data and Technical Analysis 2024

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Pound Slips After US CPI Data and Weak UK GDP Figures 2024

          .  Fundamental Analysis

                     Why Is the Pound Weakening?

  • US Inflation Data: Recent US inflation data showed that prices are rising faster than expected. This means the Federal Reserve might not cut interest rates as much as traders hoped. The market now thinks there’s an 85% chance of a smaller rate cut (25 basis points) instead of a larger one (50 basis points). This makes the US dollar stronger.
  • UK Economic Data: UK economic growth was flat (0.0%) in the latest report, missing the expected growth of 0.2%. This weak data also contributes to the pound’s decline.

Pound

Technical Analysis

Current Trend for GBP/USD:

  • Bearish Breakout: The GBP/USD pair dropped below the previous support level of 1.30450. This suggests a bearish trend, where the price may continue to fall.
  • Support and Resistance Levels:
    • Support: If the price keeps falling, it might reach 1.29400.
    • Resistance: If the price reverses and rises back above 1.30450, it could go up to 1.31450.

How Technical Analysis Helps:

  • Predicting Price Movements: Technical analysis helps identify patterns and potential future price movements based on past data. This can guide decisions on whether to buy or sell.

Potential Risks

What to Watch For:

  • Upcoming Data: Keep an eye on future economic reports like initial jobless claims and the Producer Price Index (PPI). These will provide more insights into the economy and influence market movements.

Risk Management Tips:

  • Use Stop-Loss Orders: To limit potential losses if the market moves against your position.
  • Adjust Position Size: Based on your risk tolerance and market volatility.
  • Diversify Investments: Avoid putting all your money into one asset.

Monitoring

Stay Updated:

  • Follow Market News: Keep up with updates on US and UK economic data, central bank news, and changes in the strength of the US Dollar through market insights and daily financial news.

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