The Great Britain Pound (GBP) inched higher against the US Dollar (USD) on Tuesday, increasing the price of GBPUSD to more than 1.2550 ahead of the US consumer confidence news. The technical bias has turned bullish because of a higher high in the recent upside rally.
US Consumer Confidence
The Consumer Board of the United States is due to release the consumer confidence data today. According to the average forecast of different economists, the consumer confidence registered a reading of 113.8 points in March as compared to 114.8 points in the month before.
If the customers are confident about their future, they will spend more and the economy will grow. Otherwise, they will save money and the economy will suffer.
The Consumer Confidence released by the Conference Board captures the level of confidence that individuals have in economic activity.
How to Trade Today’s Consumer Confidence News?
- Buying the GBPUSD put options near current levels can be a good strategy if the consumer confidence data comes better than forecast.
- Alternatively, buying the GBPUSD call options may be a good move if the consumer confidence misses the average projections of economists.
Technical Analysis
As of this writing, the pair is being traded near 1.2572. A support can be noted around 1.2562 (an immediate trendline support) ahead of 1.2519 (the 50% fib level) and then 1.2500 (the confluence of lower trendline as well as horizontal support area) as demonstrated in the given below hourly chart.
On the upside, a hurdle may be noted around 1.2581 (the trendline resistance area as demonstrated with pink color in the above chart) ahead of 1.2614 (the high of recent upside wave) and then 1.2700 (the psychological number). The technical bias shall remain bullish as long as the 1.2500 support area is intact.
How GBP/USD Reacted to Past Consumer Confidence Releases?
The cable fell by almost 55 pips after the release of last consumer confidence data in February as the consumer board showed upbeat consumer confidence reading of 114.8 points vs the average forecast of 111.0 points.
The pair however rose by more than 35 pips after the release of January’s consumer confidence data as the actual outcome came at 111.6 points against the forecast of 113.0 points.
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