GBP/USD Forecast Today 05/02: Look For Higher Levels (Video)

(MENAFN- Daily Forex)

• The British pound initially fell against the US dollar during the trading session on Tuesday, but really at this point in time, we are starting to see the US dollar lose some of its strength as I think a little bit of the fear of tariffs are starting to run from the market.
• But keep in mind, the bank of England has an interest rate decision on Thursday, and while they are expected to cut a quarter point from 4.75% down to 4.50%.
• The reality is the market is going to be paying close attention to the statement. Is this the beginning of a pretty significant rate cutting cycle?

Remember, the Federal Reserve is essentially on the sidelines. So, let's see how this plays out. I suspect this is probably going to be a nice shorting opportunity. I don't know if that shorting opportunity comes on Wednesday or Thursday.

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But somewhere between 1.25 and the 200 day EMA, I will be looking for signs of exhaustion to start selling again. It's really not until we break above 1.2750 on a daily close that I'm convinced the entire trend has changed. And also, I would have to see the US dollar weakening against almost everything else. As things stand right now, that's not the case. And although this has been a nice little bounce, the reality is, we're still very much in a downtrend from last September. So, with that being the case, I'm looking for an opportunity to buy cheap dollars until something changes. Thursday could be that change. Friday with the jobs report most certainly could be that change in America as well. Expect a lot of volatility, but I'm looking for that sign of exhaustion after another push higher to take advantage of.

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