empty
11.06.2024 01:00 AM
The pound has a good chance of maintaining a bullish bias. Overview of GBP/USD

The UK economy is gradually recovering from the downturn in the second half of 2023. GDP growth in Q1 was 0.9% after falling 0.8% in the second half of 2023. The first data for April will be published on Wednesday, and there is no reason to assume that growth will turn negative again.

The day before that the Labor Market Report will be released, which is traditionally important in terms of average wage trends. It peaked last July at 8.5% before starting to decline, but has remained relatively stable near 5.7% for the past four months. This is still too much to expect a Bank of England rate cut, with the market seeing the first cut in November, although there is a slight possibility in favor of September.

This image is no longer relevant

As we can see, the Bank of England rate outlook is very close to the Federal Reserve rate outlook, meaning that the current GBP/USD quotes do not include expectations of a possible change in the yield differential, and the current rise in the pound is more due to the pace of economic recovery and a slightly higher threat of inflation resumption than in the US. The BoE's next meeting is on July 20, the market is confident that there will be no rate cut and will focus on macroeconomic indicators such as employment and wages.

Wednesday will be a key day for the pound, as before the release of the US inflation report and the outcome of the Fed meeting, a number of its own macroeconomic indicators will be released - GDP for April, trade balance, industrial production indices, plus NIESR's estimate of the GDP growth rate in May. Before the Fed meeting these data will have little impact, but after the meeting they will be factored into the overall picture, and so far forecasts suggest that these data will be in the pound's favor.

The net long GBP position increased by 1.4 billion during the reporting week, the total bullish bias is 3.5 billion. The bullish correction has been ongoing for the sixth consecutive week, the price is distinctly above the long-term average, and even Friday's shocks did not turn it down.

This image is no longer relevant

The pound met strong resistance near the 1.2790/2810 trendline, but the bearish pullback, unlike the euro, was shallow. GBP found support near the technical level (23.6% pullback from the April-May rise), the next support is 1.2620/30, but the probability of a decline to these levels appears low. We expect GBP/USD to resume growth after consolidation, strong movements are unlikely before the Fed meeting. We see the local high of 1.2892 as the nearest target.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

AUD/JPY. Analysis and Forecast

The AUD/JPY pair has been under selling pressure for the third consecutive day, reaching an almost two-week low around 92.30 during Friday's Asian session. After a sharp drop, spot prices

Irina Yanina 12:53 2025-06-13 UTC+2

Israeli Missile Strike on Iran Will Crash Global Markets (I Expect Bitcoin and #NDX to Resume Their Decline After a Local Upward Correction)

As I anticipated, the lack of a broad positive outcome in negotiations between China and the U.S. and renewed inflationary pressure led to a sharp decline in demand for corporate

Pati Gani 10:10 2025-06-13 UTC+2

Greed Will Do the Market No Good

The less you know, the better you sleep. Encouraged by a 21% rally in the S&P 500 from its April lows, the crowd continues to buy the dip—completely unbothered

Marek Petkovich 09:35 2025-06-13 UTC+2

What to Pay Attention to on June 13? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for Friday, but we doubt that the data will significantly impact traders today—especially today. As a reminder, Donald Trump intends to raise tariffs

Paolo Greco 07:16 2025-06-13 UTC+2

GBP/USD Overview – June 13: The Court Won't Stop Donald Trump!

The GBP/USD currency pair continued its upward movement on Thursday and nearly updated its three-year high. For most of the day, quotes hovered around the 1.36 level

Paolo Greco 03:41 2025-06-13 UTC+2

EUR/USD Overview – June 13: America's Economy Gets Lucky

The EUR/USD currency pair continued its strong upward movement throughout Thursday. Is anyone still puzzled as to why the U.S. dollar keeps falling? From our point of view, the reasons

Paolo Greco 03:41 2025-06-13 UTC+2

Trump Sends Out "Letters of Happiness"

It has been less than two weeks since Donald Trump raised import tariffs on steel and aluminum for all countries except the UK. While negotiations with the UK were deemed

Chin Zhao 00:21 2025-06-13 UTC+2

GBP/USD. A Weak Pound Stronger Than a Weak Greenback

Following weak UK labor market data, equally soft figures on British economic growth were released on Thursday. Almost all components of the report came out in the "red zone," increasing

Irina Manzenko 00:20 2025-06-13 UTC+2

The Dollar Flees the Battlefield

The old becomes new again. The word "recession" again trended in the Forex and other financial markets. May's U.S. Consumer Price Index (CPI) fell short of Bloomberg analysts' forecasts. Following

Marek Petkovich 00:20 2025-06-13 UTC+2

Market sells facts

Markets rise on rumors and fall on facts. For a long time, the S&P 500 had been rising due to investors' confidence in a US-China trade agreement. Once the deal

Marek Petkovich 16:53 2025-06-12 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.