Bullish view
Bearish view
(Click on image to enlarge)The GBP/USD exchange rate continued rising, reaching a high of 1.2550, its highest level since January 7 as focus shifted to the upcoming Bank of England (BoE) decision. It has jumped by about 3.4% from the year-to-date low.
BoE interest rate decisionThe rose as the market waited for the upcoming Bank of England decision. Economists expect the bank to deliver its third interest rate cut of this cycle as it works to boost the economy.A 0.25% rate cut will bring it to 4.50% from 4.75%. The bank will also signal that it will continue cutting rates this year because of the slowing economy.The most recent data showed that the country’s economy was slowing. EY estimates that it grew by just 1% in 2024, down from the previous estimate of 1.5%.UK’s inflation has also started to fall and is moving towards the 2% target. The most recent data showed that the headline CPI moved from 2.6% in November to 2.5% in December.The GBP/USD pair also rose after ADP published strong private payroll data, which showed that employees added 184k jobs in January, a big increase from the previous 164k.The ADP report came a day ahead of the upcoming official nonfarm payroll data. Economists expect the report to show that the economy created 154k jobs in January after adding 256k a month earlier.While the labor numbers are important, they will not have a big impact on the Federal Reserve since it is focusing on inflation, which has remained significantly above the 2% target.
GBP/USD technical analysis
The GBP/USD exchange rate bottomed at 1.2100 earlier this year and has now bounced back to 1.2550, its highest level since January 7.It is attempting to move above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) and the MACD indicators have pointed upwards.The GBP/USD pair has also jumped above the key resistance level of 1.2295, which was its lowest point in April last year.Therefore, the pair will likely continue rising as bulls target the next key resistance level at 1.2610, the lowest point in June last year. A drop below the support at 1.2400 will invalidate the bullish view.GBP/USD Forex Signal: Inverse Head And Shoulders Pattern FormsBTC/USD Forex Signal: Bullish Flag Points To A Jump To ATHBTC/USD Forex Signal: Bullish Outlook As Tensions Fall
