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/USD. Analysis and Forecast

The AUD/USD pair is attempting to attract buyers in its rebound from the psychological level of 0.5900, marking its lowest point since March 2020. The upward momentum has managed

Irina Yanina 12:39 2025-04-11 UTC+2

Markets Face a Prolonged Period of Instability (USD/JPY and USD/CHF Likely to Continue Falling)

On Thursday, investors realized there is currently no such thing as stability. High market volatility remains and will continue to dominate for some time. The ongoing cause of this remains

Pati Gani 09:11 2025-04-11 UTC+2

The Market Has Grown Used to Chaos

What is life if not a game? In past years, investors focused on the standoff between the Federal Reserve and financial markets. But in 2025, the rules of the game

Marek Petkovich 08:42 2025-04-11 UTC+2

What to Pay Attention to on April 11? A Breakdown of Fundamental Events for Beginners

A relatively large number of macroeconomic events are scheduled for Friday, but none are expected to impact the market. Of course, we may see short-term reactions to individual reports

Paolo Greco 06:04 2025-04-11 UTC+2

GBP/USD Overview. April 11: The Market Didn't Believe Trump

The GBP/USD currency pair also traded higher on Thursday. As a reminder, macroeconomic and traditional fundamental factors currently have little to no influence on currency movements. The only thing that

Paolo Greco 03:28 2025-04-11 UTC+2

EUR/USD Overview. April 11: The American Comedy Continues

The EUR/USD currency pair declined sharply overnight on Wednesday but showed some recovery during the day. On Thursday, there was further growth—this series of fluctuations can only be described

Paolo Greco 03:28 2025-04-11 UTC+2

Trading Recommendations and Analysis for GBP/USD on April 11: The Dollar Takes a Double Hit

The GBP/USD currency pair also showed strong growth on Thursday, although not as strong as the EUR/USD pair. The pound gained only around 200 pips—which isn't a considerable move under

Paolo Greco 03:28 2025-04-11 UTC+2

EUR/USD. A Message from the Past: U.S. CPI Report Fails to Support the Dollar

The CPI report released on Thursday showed weaker-than-expected inflation. The market responded accordingly: the U.S. dollar came under renewed pressure (the U.S. Dollar Index fell into the 100.00 range)

Irina Manzenko 00:47 2025-04-11 UTC+2

The Euro Charges Ahead. Opponents Retreat

A rally in European stock indices, slowing U.S. inflation, and the fact that the average U.S. tariff has not changed significantly despite the 90-day deferral all contributed to the rise

Marek Petkovich 00:47 2025-04-11 UTC+2

XAU/USD. Analysis and Forecast

Today, gold maintains a positive tone, trading above the $3100 level. Concerns about the escalation of the trade war between the U.S. and China, along with fears of a global

Irina Yanina 20:05 2025-04-10 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.