GBP/USD Signal Today 06/05: Remains Under Pressure (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3430.
• Add a stop-loss at 1.3150.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3150.
• Add a stop-loss at 1.3430.

The GBP/USD pair has retreated in the past few days as the recent bullish momentum faded. It dropped to a low of 1.3278 this week, down from the year-to-date high of 1.3431, as focus shifted to the upcoming Federal Reserve and Bank of England (BoE) interest rate decisions Reserve decision ahead

The GBP/USD pair retreated after the ISM released the latest US services PMI data. These numbers showed that the PMI rose to 51.6 in April, higher than the previous 50.8, and the expected 51.4. These numbers mean that the economy is doing relatively well despite the ongoing tariff challenges.

The data came after the US published the nonfarm payrolls (NFP) data. Economic numbers revealed that the economy created over 177,000 jobs in April, much higher than what analysts were expected. The unemployment rate remained unchanged at 4.2%.

These numbers came ahead of the upcoming Federal Reserve interest rate decision. Economists expect that the bank will neither cut nor hike interest rates since inflation remains a big challenge.

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It will be the third consecutive meeting that the bank has not cut rates despite increased pressure from Donald Trump.

The other top GBP/USD news will come on Thursday when the Bank of England (BoE) will deliver its interest rate decision. Unlike the Fed, economists expect the BoE to slash interest rates by 0.25%, bringing the benchmark rate to 4.25%.

The bank will slash rates since the UK economy is slowing, while inflation has moved towards the target of 2.0%. It hopes that the rate cuts will help to boost the country's economic growth.

EURUSD Chart by TradingViewGBP/USD technical analysis

The daily chart shows that the GBP/USD pair has pulled back in the past few days, moving from a high of 1.3431 to a low of 1.3278. All oscillators, including the Relative Strength Index (RSI) and the Awesome Oscillator, have tilted downwards, a sign that it has lost momentum.

On the positive side, the pair has formed a large cup and handle pattern, a popular bullish continuation sign. This retreat is part of the handle section.

Therefore, the pair will likely resume the upward trajectory and retest the key resistance point at 1.3431. A move above that level will point to more gains, potentially to the key resistance level at 1.3500.

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