GDP/USD - Bearish [ ]
-Timeframe: 1D-
The US dollar is showing signs of strength against other currencies, and I believe we could have another profitable trading opportunity based on the current price action and the upcoming economic data.
GBP/USD pair is forming a rising wedge pattern, which is a bearish reversal indicator.
The pair is approaching the bottom trendline of the wedge, which could act as a support level and trigger a short term bounce or bearish breakout.
Targeting 1.143 which gives us a potential drop of about 10% by the end of the year or by mid 2024.
The bearish scenario is also supported by the fundamental factors, such as the inflation and the consumer price index (CPI) data.
The next CPI report, next week is expected to show a higher inflation rate year-over-year, which would be the first inflation bounce in a while.
This could cause the market to react negatively and drive up the demand for the US dollar as a safe-haven asset, as investors anticipate higher interest rates and tighter monetary policy from the Federal Reserve.
I'm opening a short position at the current level and will add near the upper trendline of the wedge, with a stop-loss above the recent highs and a take-profit at the target level mentioned above.
However, it is also important to monitor the market sentiment and adjust the position accordingly, as there may be unexpected events or developments that could invalidate the analysis.
