The United Kingdom started today its gradual opening and the British Pound celebrated by opening the trading week with a bid tone. The market is currently trading above 1.3750, and the price action suggests further upside possible.
No important economic events are expected from the United Kingdom this week, and so the focus shifts to news from the other side of the Atlantic. The inflation data tomorrow is supposed to show rising prices, and the market participants will pay attention to how much the prices rose in the past month.
The chances are that the inflation data will surprise to the upside, and so the GBP/USD may continue its rally. One day later, the Fed’s Chair Powell will speak at the Economic Club of Washington, and audience questions are expected.
GBP/USD Technical Analysis
From a technical perspective, the market appears to have formed a bullish flag. A break higher suggests further strength, with long-term bulls eyeing a move toward the 1.48 area.
While inside the consolidation area, traders may want to buy any dip into dynamic support and add on the long side once the price breaks higher. A move above the upper trendline may attract further buying interest with a stop at the lows and a target of 1.48 as suggested by the flag’s measured move.