Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

GBP/USD Forex Signal: Pound Sterling Braces for More Gains

Bullish view

  • Buy the GBP/USD pair and set a take-profit at 1.2800.
  • Add a stop-loss at 1.2650.
  • Timeline: 1-2 days.

Bearish view

  • Sell the GBP/USD pair and set a take-profit at 1.2650.
  • Add a stop-loss at 1.2800.

GBP/USD Signal Today - 23/05: Pound Sterling Upsurge (Chart)

The GBP/USD exchange rate continued its strong recovery this week after the hotter-than-expected UK consumer inflation data and the hawkish FOMC minutes. It jumped to a high of 1.2760, its highest increase since March 21st.

UK inflation and BoE rate cuts

The GBP/USD pair rose after a report by the Bank of England (BoE) showed that the country’s inflation remained hotter than expected. According to the Office of National Statistics (ONS), the headline Consumer Price Index (CPI) slowed to 2.3% in April from 3.2% in March. The retreat was higher than the median estimate of 2.1%.

The core CPI slowed from 4.2% to 3.9%, also higher than the median estimate of 3.6%. These numbers mean that the country’s inflation is still slowing but at a slower pace than expected. As a result, there are concerns that the BoE will not slash interest rates in June as it had hinted since the core CPI is almost double the bank’s target of 2.0%.

Top Forex Brokers

    The GBP/USD pair also rose slightly after the latest FOMC minutes. These minutes revealed that the committee remained concerned about inflation in the US. They also deliberated about the hiking interest rates during the meeting.

    Most analysts expect that the bank will start cutting interest rates in the fourth quarter of the year if inflation continues easing. Some analysts expect that the key inflation drivers like housing and insurance will start easing later this year.

    The key economic numbers to watch on Thursday will be the flash manufacturing and services PMI data from the US and the UK. Economists expect these numbers to show that the UK manufacturing PMI remained below 50 in May. In the US, economists expect the data to reveal that the two PMIs rose to 51.2 and 51.3%, respectively.

    GBP/USD technical analysis

    The GBP/USD exchange rate has been in a strong uptrend in the past few weeks. It has jumped from April’s low of 1.2300 to a high of 1.2760 (78.6% Fibonacci Retracement point). The current price also coincides with the highest swing on April 9th.

    It has also remained above the 50-period and 25-period moving averages. Most importantly, it has formed an inverse head and shoulders pattern, a popular bullish sign. Therefore, the pair will likely maintain the bull run as buyers target the next psychological point at 1.2800.

    Ready to trade our daily Forex signal? Check out the best forex brokers in the UK worth using. 

    Crispus Nyaga
    About Crispus Nyaga
    Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.
     

    Most Visited Forex Broker Reviews