GBP/USD – Volatility Expected for GBP/USD as UK and US Economic Data Take Center Stage
Bullish View
- Take Profit: 1.2600
- Stop Loss : 1.2450
- Timeline: 1-2 days
Bullish View
- Take Profit: 1.2450
- Stop Loss : 1.2600
Tuesday is expected to bring volatility for the GBP/USD currency pair as investors react to the latest economic data from the UK and the US. The UK will release its jobs numbers, with economists predicting that the unemployment rate remained steady at 3.7% in April. They also anticipate a significant increase of 6.8% in average earnings during the same month. These figures hold importance as they precede the upcoming interest rate decision by the Bank of England (BoE) in a week’s time. It is widely expected that the BoE will raise interest rates by 0.25% due to the persistently high inflation, which surpasses the target of 2.0%.
Moving forward, the GBP/USD pair will also respond to the upcoming interest rate decision by the Federal Reserve. Economists believe that the Fed will maintain rates at 5.25% this week. This view aligns with statements from the new Fed chair, who emphasized the need for a pause to assess the impact of previous rate hikes. From a technical analysis perspective, the GBP/USD pair experienced a sharp reversal after retesting the first support of the Andrews Pitchfork tool. Currently, it hovers slightly above the lower side of this pitchfork tool and has dropped below the significant support level at 1.2538, which was the high point on June 2nd. However, the pair has managed to remain above the 50-period moving average and the ascending trendline, indicating a bullish trend. To shift this outlook, the pair would need to fall below both the 50-period MA and the lower side of the pitchfork tool.