GBP/USD Forex Signal Today 14/05: Bullish Engulfing (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3433.
• 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 take-profit at 1.3433.

The GBP/USD exchange rate rose after the US published encouraging consumer inflation data on Tuesday. It rose to a high of 1.3300 on Wednesday, up by 1.25% from its lowest level this month inflation softened again

The GBP/USD pair rose after the US published a good inflation report showing consumer prices softened in April. According to the Bureau of Labor Statistics (BLS), the headline consumer inflation figure moved from minus 0.1% in March to 0.2% in April this year.

The CPI dropped from 2.4% to 2.3% as it slowly approached the Federal Reserve target of 2.0%. Meanwhile, the core consumer inflation data moved from 0.1% to 0.2% on a MoM basis and remained at 2.8% annually.

These numbers mean that the impact of Donald Trump's tariffs are taking longer to rise as analysts were expecting. Still, analysts see the inflation starting to gain momentum in the coming months as companies adjust their prices.

The US inflation data came a week after the Federal Reserve met and left interest rates unchanged. Officials warned that tariffs will ultimately push prices higher and affect the economic recovery. As a result, they maintained a wait-and-see approach, hinting that they will not be ready to cut interest rates soon.

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The GBP/USD exchange rate also reacted to the latest UK jobs data. According to the Office of National Statistics (ONS), the unemployment rate rose to 4.5% in March from the previous 4.4%. This happened as the employment change rose by 112k in March and the average earnings rose by 5.6%.

The next important catalyst for the GBP/USD pair will come out on Thursday when the ONS will release the GDP, industrial and manufacturing production, and construction output for March. The US will also publish the latest retail sales data on the same day.

EURUSD Chart by TradingViewGBP/USD technical analysis

The daily chart shows that the GBP/USD pair peaked at 1.3433 in April and then retreated to a low of 1.3140 on Monday. It then bounced back to 1.3300 on Tuesday afte the encouraging US inflation data.

The pair remains above all moving averages and is still forming the handle section of the cup and handle pattern. Cup and handle is one of the most popular bullish continuation signs in the market.

The pair has also formed a bullish engulfing pattern. Therefore, it will likely keep rising as bulls target the key upper side of the cup at 1.3435. A drop below the support at 1.3140 will invalidate the bullish outlook.

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