GBP/USD Daily Price Forecast – The Cable Bulls Buckle-up Ahead of BoE’s Interest Rate Decision

After yesterday’s slump post-FOMC data, the pair was underway recovery today morning. Voters may punish May in today’s local election, showing their unhappiness over her Brexit approach.
Nikhil Khandelwal
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After the release of the neutral FOMC meeting minutes, the GBP/USD had dropped 0.46 percent in the last NA session. Anyhow, the Cable managed to hit the opening bell on Thursday morning near 1.3052 levels. During the initial hours, the pair had showcased a range bound performance sustaining within 1.3049 and 1.3061 levels.

The critical event that will have a significant impact on the Pound pair is the BoE’s Rate decision. There remains a higher possibility of a steady interest to sustain this time. The BoE seems to keep the rates unchanged until the end of 2019. And, a requirement for a rate hike may arise post-Brexit. However, UK economic reports showed poor unemployment figures and wages, demanding an interest upliftment.

“Heading into this week’s BoE meeting we see more scope for a hawkish surprise than a dovish one,” Bank of America Merrill Lynch interest rates strategist Sebastien Cross said in a note to clients.

In the meanwhile, uncertainties continued to appear around the Brexit front. UK local government elections are scheduled later the day. The voters are set to punish the UK PM Theresa May, showing their discontent towards her approach for a Brexit. The Labour party may gain support this time over its Conservative counterpart.

On the other side of the equation, the Greenback had a remarkable 0.59 percent jump yesterday. The FOMC meeting minutes displayed a hawkish stance on the economic growth and hawkish over inflation figures. The US Dollar Index gets back on track erasing the previous losses.

GBP/USD Significant Events

GBP Specific Events

08:00 GMT

UK April Markit Construction PMI (Mid Volatile) – The market keeps a bullish stance over the index to grow 1.21 percent this time.

11:00 GMT

BoE Interest Rate Decision (High Volatile) – The consensus estimates the rates to remain unchanged near 0.75 percent.

USD Specific Events

12:30 GMT

Jobless Claims (Mid Volatile Event) – The market remains bullish over the Initial Jobless Claims while displayed a bearish stance on the Continuous Jobless Claims. Overall, it is a bearish call over the unemployment figures.

Nevertheless, Non-Farm Productivity will come out in the same time frame. The figures are hoped to report a 0.3 percent growth this time.

14:00 GMT

March MoM Factory Orders – The Street analysts expect the figures to come around positive 1.5 percent to the prior negative 0.5 percent.

Technical Analysis

GBPUSD 60 Min 02 May 2019

After drifting near the upper boundary of the Bollinger Bands (BB), the GBP/USD pair went down crossing the EMA. This downward movement of the Cable reveals of a future bearish trend. Notably, the Cable hovered above the significant Simple Moving Averages (SMA) developing active bull calls. Anyhow, in the near term, the pair may find space on the upside observing the 50-days SMA position. The pair may anytime cross the center line again, but this time it may go upwards. The Relative Strength Index (RSI) backed the pair’s performance, pointing near 50 levels.

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