GBP/USD Forex Signal Today 29/05: More Gains (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3590.
• Add a stop-loss at 1.3385.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3385.
• Add a stop-loss at 1.3590.

The GBP/USD pair retreated below the psychological point at 1.3500 after the Federal Reserve published minutes of the last meeting. It has dropped by over 1% from the highest point this year minutes and key US economic data

The GBP/USD pair dropped after Federal Reserve published minutes of the last monetary policy meeting. These minutes showed that officials saw no need for rushing to cut interest rates because of the uncertainty on Trump's tariffs.

Officials believe that time is on their side before starting to cut interest rates. As a result, most analysts anticipate thar the bank will start cutting rates in the September meeting.

The pair also retreated ahead of the important economic data from the US. The Bureau of Economic Analysis (BEA) will publish the second estimate of the first quarter GDP data.

Economists expect the data to show that the economy contracted by 0.4% in Q1 after growing by 2.4% in the fourth quarter as companies and consumers scaled back on their consumption because of Donald Trump's tariffs.

The US will also release the latest pending home sales and initial jobless claims data. Also, the statistics agency will release the April personal consumption expenditure data on Friday. Economists expect the report to show that the PCE fell from 2.3% in March to 2.2% in April, a sign that it is moving towards the Fed's target of 2.0%.

While this trend is good, officials worry that Trump's tariffs on imported goods will push prices higher later this year. Retailers like Target and Walmart have all hinted that they will hike prices.

EURUSD Chart by TradingViewGBP/USD technical analysis

The GBP/USD exchange rate rose to a high of 1.3592 earlier this week and then pulled back after the US consumer confidence data on Tuesday and the FOMC minutes on Wednesday.

The pair is slightly above the key support at 1.3430, the upper side of the cup-and-handle pattern that has been forming since last year. Cup and handle is one of the top continuation signs in technical analysis.

The GBP/USD pair remains above the 50-day moving average. Therefore, the most likely scenario is where it drops and retests the support at 1.3430 and then resumes the uptrend. More gains will be confirmed if the pair rallies above the year-to-date high of 1.3592. A drop below the upper side of the cup at 1.3430 will invalidate the bullish view.

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