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The GBP/USD pair was in a tight range on Thursday as investors reflected on the latest US consumer confidence and new home sales data. The pair is trading at 1.3765, which was slightly below the intraday high of 1.3822.
US consumer confidence
Americans are getting more confident about the economy. Data published by the Conference Board showed that the country’s consumer confidence rose to 113.8 in September. This was a better performance than the previous 109.8. It was also substantially better than the median estimate of Wall Street analysts who were expecting the data to show that confidence declined to 108.3.
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The data came at the same time as the US published the new home sales numbers for September. The numbers revealed that the housing market is still tightening. New home sales rose by 14% to 800k. This was better than the previous 702k.
Just last week, data by the National Association of Realtors (NAR) showed that the country’s existing home sales numbers jumped in September. Looking ahead, the next key data to watch from the US will be the latest durable goods order data.
The GBP/USD is also in a tight range as investors wait for the latest UK budget that will be read by Rishi Sunak on Wednesday. Rumours towards the budget is that the administration will cut some taxes for banks. It will also offer some tax increases in order to increase funding for the NHS.
Also, the pair is reacting to the likely actions of the Federal Reserve and the Bank of England (BOE). Analysts expect that these banks will deliver hawkish statements when they meet in November since consumer prices have surged recently.
GBP/USD forecast
The daily chart shows that the GBP/USD pair has been in a strong bullish trend lately. It has managed to move by more than 2% from its lowest level in September. It has also moved above the 25-day and 50-day moving averages. However, the pair has also formed what looks like a rising wedge pattern. In technical analysis, a rising wedge is usually a bearish sign.
Therefore, there is a likelihood that the pair will have a bearish breakout as we move into a new month. The key level to watch will be the September low at 1.3400.
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