The GBP/USD exchange rate maintained its upward trajectory, achieving its peak level since February 11 of this year. The value increased to 1.3652, marking a significant rise from the year-to-date low of 1.3162. This rally occurred as a divergence between the Federal Reserve and the Bank of England became apparent. The GBP/USD pair experienced an increase following the interest rate decisions made by the Federal Reserve and the Bank of England. The two banks opted to maintain interest rates at their current levels, sustaining a pattern observed over the recent months.
However, these indicators suggest that the BoE is likely to raise interest rates in the upcoming meeting in June, pointing to robust inflation amid the ongoing US-Iran conflict. The latest figures indicate that the headline consumer price index increased to 3.3% in March of this year, diverging further from the bank’s target of 2.0%. The Federal Reserve, on the other hand, opted to maintain interest rates at a range of 3.50% to 3.75%, upholding a consistent trend that has persisted for several months. The statement suggested that the bank may be open to reducing rates this year.
The next significant driver for the GBP/USD pair will be the forthcoming US macroeconomic data, particularly the non-farm payrolls report. These figures will offer greater insight into the condition of the economy. Analysts anticipate that the data will indicate a decline in the labor market, with the unemployment rate holding steady at 4.3%. The daily timeframe chart indicates that the GBP/USD pair has been trading within a tight range over the past few weeks. The price stayed within the established support and resistance boundaries of 1.3475 and 1.3595.
The pair continues to trade above the 50-day and 100-day Exponential Moving Averages. A bullish flag pattern has emerged, with the Relative Strength Index and the Percentage Price Oscillator both on an upward trajectory. Consequently, the pair is expected to experience a significant bullish breakout, possibly reaching the next critical resistance level at 1.3800. A decline beneath the support level of 1.3474 will negate the optimistic perspective and indicate potential further declines.