Bearish view

  • Sell the GBP/USD pair and set a take-profit at 1.2650.
  • Add a stop-loss at 1.2800.
  • Timeline: 1-2 days.
  •  Bullish view

  • Buy the GBP/USD pair and set a take-profit at 1.2800.
  • Add a stop-loss at 1.2650.
  • The GBP/USD exchange rate wavered after the US published a red-hot May jobs report on Friday. It was trading at 1.2720 as traders focus on Wednesday’s upcoming Federal Reserve interest rate decision. Federal Reserve decision aheadThe GBP/USD pair reacted mildly to May’s jobs numbers. According to the Bureau of Labor Statistics (BLS), the economy created over 272k jobs in May after creating 165k in the previous month. That increase was better than the median estimate of 170k.Meanwhile, wages continued growing as the average weekly hours remained steady. The average hourly wage rose by 0.4% MoM and 4.1% YoY. These increases was higher than the median estimate of 0.3% and 3.9%, respectively.These numbers mean that the Fed could hold rates steady for a while since inflation has remained significantly above the 2% target. The headline CPI rose to 3.4% in April while the Personal Consumption Expenditure (PCE) inflation rose to 2.5%.The pair also reacted to the latest CoT report by the CFTC. In its report, the agency said that hedge funds remained bullish on the British pound last week. Their bullish positions rose to 43.2k from 25.4k a week earlier.Looking ahead, the next important catalyst for the GBP/USD pair will be the upcoming Federal Reserve decision set for Wednesday. Economists expect the bank will leave interest rates between 5.25% and 5.50%.In recent statements, economists at JPMorgan and Citigroup have hinted that the Fed will likely start cutting interest rates in its July meeting. They cite other recent data that showed that the economy was slowing.For example, the ISM manufacturing PMI dropped to 48.7 in May, a figure that implied that the sector was slowing. There are also signs that inflation is falling. For example, the price of crude oil has tumbled to the lowest swing in months. GBP/USD technical analysisThe GBP/USD pair has moved sideways in the past few days. It was trading at 1.2720, a few points below last week’s high of 1.2815, where it formed a double-top pattern. The pair has moved below the middle line of the Andrew’s Pitchfork tool. It has remained slightly above the 50-day Exponential Moving Average (EMA).The Relative Strength Index (RSI) has pointed downwards. Therefore, the pair will likely remain in this range ahead of the Fed decision. The key support and resistance levels to watch will be at 1.2650 and 1.2800.More By This Author:AUD/USD Forex Signal: On The Cusp Of A Bearish Breakout To 0.6540 BTC/USD Forex Signal: Bitcoin Bull Run To Gain MomentumSMCI Stock Price Analysis: Is Super Micro Computer A Bargain?

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