GBP/USD – GBP/USD Reacts to UK Jobs Data, BoE Rate Decision, and US Interest Rate Speculations
Long Position
- Take Profit: 1.2600
- Stop Loss : 1.2450
- Timeline: 1-2 days
Short Position
- Take Profit: 1.2450
- Stop Loss : 1.2600
On Tuesday, the GBP/USD currency pair is expected to experience some volatility as traders react to the latest economic data releases from the UK and the US. The UK will be publishing its jobs numbers, and economists anticipate that the unemployment rate for April will remain steady at 3.7%. They also predict a significant increase of 6.8% in average earnings for the month. These figures are crucial as they precede the upcoming interest rate decision by the Bank of England, which is projected to raise rates by 0.25% due to inflation exceeding the 2.0% target. The next significant event that will impact the GBP/USD pair is the upcoming interest rate decision by the Federal Reserve. Economists expect the bank to maintain rates at 5.25% this week, as communicated by the new Fed chair who emphasized the need for a pause to evaluate the effectiveness of previous rate hikes.
From a technical analysis perspective, the GBP/USD pair experienced a sharp reversal after testing the first support level of the Andrews Pitchfork tool. It is currently slightly above the lower side of the pitchfork, having dropped below the important support at 1.2538, which was the highest point on June 2nd. However, the pair has remained above the 50-period moving average and the ascending trendline, indicating a bullish trend. To shift the trend, the pair would need to move below both the 50-period MA and the lower side of the pitchfork tool.
