GBP/USD Forex Signal Today 04/06: More Upside (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3650.
• Add a stop-loss at 1.3430.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3430.
• Add a stop-loss at 1.3650.

The GBP/USD exchange rate held steady close to the highest point this year as traders assessed the next actions by the Federal Reserve and the Bank of England (BoE). It was trading at 1.3520, a few points below the year-to-date high of 1.3592.

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The daily chart shows that the GBP/USD pair has remained in an uptrend after bottoming at 1.2100 on January 13. It rebounded to 1.3520, up by over 11.7% from its lowest point this year.

The pair has formed a cup-and-handle pattern, which comprises of a horizontal support and a rounded bottom. This pattern usually leads to a strong bullish breakout, which is confirmed when it moves above the upper side and then retests it.

The GBP/USD pair has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls remain in control this year.

Also, the Relative Strength Index (RSI) and the MACD indicators have pointed upwards. Rising oscillators is a sign that the bullish momentum is continuing.

Therefore, the pair will likely continue rising as bulls target the next key resistance level at 1.3650. A drop below the support at 1.3430, the upper side of the cup will invalidate the bullish outlook and point to more downside.

EURUSD Chart by TradingViewKey catalysts for the GBP to USD pair

The GBP/USD pair will have a few catalysts on Wednesday. First, S&P Global will publish the latest composite and services PMI data, providing more color about the state of the British economy.

Economists, using the recently released flash PMI data, expect the data to show that the services PMI rose to 50.2, while the composite figure moved from 48.5 to 49.5. A PMI figure of 50 and above is a sign that a sector is doing well.

The ADP will publish the private payroll data, which is expected to show improvement in hiring. Analysts expect the data to reveal that the private sector created 115k jobs, a big increase from 62 in April.

S&P Global and the ISM will also release the services PMI numbers, which are expected to remain above 50.

Some Fed officials, like Lisa Cook and Raphael Bostic, will talk. In a statement on Tuesday, Cook said that she expected tariffs will lead to higher inflation and complicate the Fed's interest rate decision scenario.

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