The pair will likely keep falling, with the next reference level being at 1.2900.
Sell the GBP/USD pair and set a take-profit at 1.2900.Add a stop-loss at 1.3080.Timeline: 1 day.
Set a buy-stop at 1.3060 and a take-profit at 1.3150.Add a stop-loss at 1.2950.
The GBP/USD remained under pressure ahead of the upcoming UK consumer and producer inflation data. It is trading at 1.300, where it has been in the past few days. This price is near the pair’s lowest level since 2020.
UK Inflation Data Ahead
The GBP/USD pair has been in a strong bearish trend in the past few weeks because of the overall strong US dollar. Investors have been worried about the rising bond yields, which have signaled that the Fed will be more hawkish in the coming months.
The US published strong inflation data on Wednesday. The headline CPI came in at 8.5%, which was slightly better than what analysts were expecting. Core CPI, which excludes volatile items like food and energy rose to 6.6%.
The next key catalyst for the GBP/USD pair will be the latest inflation data from the United Kingdom that are scheduled for Wednesday. Economists expect these numbers to show that the headline consumer price index rose from 6.2% in February to 6.7% in March. On a month-on-month basis, they expect that inflation fell from 0.8% to 0.7%. The US will publish the PPI numbers today.
Meanwhile, economists expect that the core CPI declined from 0.8% to 0.55 on a MoM basis. This decline is expected to have translate to a year-on-year gain of 5.4%. The UK and other European countries are expected to see more inflation because of the ongoing crisis in Ukraine.
These numbers will come two days after the UK published weak GDP numbers. The data showed that the economic growth was a bit limited in February. On Tuesday, numbers revealed that the unemployment rate dropped in February. Wage growth continued to lag inflation.
The daily chart shows that the GBP/USD pair has been in a strong bearish trend for almost a year. It has declined by more than 8.68% from the highest point in April last year. And now, the price has found a strong support at around 1.300, which was the lowest level this year. It gas also moved below all moving averages and the Ichimoku cloud. Therefore, the pair will likely keep falling, with the next reference level being at 1.2900.