GBP/USD Forex Signal Today 06/02: Bullish Momentum (Chart)
Bullish view
- Purchase the GBP/USD pair and set a take-profit at 1.2620.
- Add a stop-loss at 1.2400.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.2500 and a take-profit at 1.2400.
- Add a stop-loss at 1.2620.
The GBP/USD change charge continued rising, reaching a excessive of 1.2550, its highest stage since January 7 as focus shifted to the upcoming Financial institution of England (BoE) determination. It has jumped by about 3.4% from the year-to-date low.
BoE rate of interest determination
The GBP/USD pair rose because the market waited for the upcoming Financial institution of England determination. Economists anticipate the financial institution to ship its third rate of interest lower of this cycle as it really works to spice up the economic system.
A 0.25% charge lower will deliver it to 4.50% from 4.75%. The financial institution may even sign that it’s going to proceed reducing charges this yr due to the slowing economic system.
The newest information confirmed that the nation’s economic system was slowing. EY estimates that it grew by simply 1% in 2024, down from the earlier estimate of 1.5%.
UK’s inflation has additionally began to fall and is shifting in the direction of the two% goal. The newest information confirmed that the headline CPI moved from 2.6% in November to 2.5% in December.
The GBP/USD pair additionally rose after ADP revealed sturdy non-public payroll information, which confirmed that workers added 184k jobs in January, an enormous improve from the earlier 164k.
The ADP report got here a day forward of the upcoming official nonfarm payroll information. Economists anticipate the report to indicate that the economic system created 154k jobs in January after including 256k a month earlier.
Whereas the labor numbers are necessary, they won’t have a huge impact on the Federal Reserve since it’s specializing in inflation, which has remained considerably above the two% goal.
GBP/USD technical evaluation
The GBP/USD change charge bottomed at 1.2100 earlier this yr and has now bounced again to 1.2550, its highest stage since January 7.
It’s making an attempt to maneuver above the 50-day Exponential Shifting Common (EMA), whereas the Relative Energy Index (RSI) and the MACD indicators have pointed upwards.
The GBP/USD pair has additionally jumped above the important thing resistance stage of 1.2295, which was its lowest level in April final yr.
Subsequently, the pair will probably proceed rising as bulls goal the following key resistance stage at 1.2610, the bottom level in June final yr. A drop beneath the help at 1.2400 will invalidate the bullish view.
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