GBP/USD Forex Signal Today 02/07: Rally Gains Steam (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3850.
• Add a stop-loss at 1.3650.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3650.
• Add a stop-loss at 1.3850.

The GBP/USD exchange rate continued its strong rally this week after the US Senate voted for the Big Beautiful Bill. It was trading at 1.3740 on Tuesday as traders waited for the upcoming US jobs data Beautiful Bill passes

The GBP/USD pair rose after the US Senate voted in favor of Donald Trump's Big Beautiful Bill. This bill will include a $4.5 trillion tax cut and $1.2 trillion spending cuts, leading to a $3.3 trillion deficit.

Republican Senators like Susan Collins, Thom Tillis, and Rand Paul voted against the bill, which now goes back to the House of Representatives.

Analysts worry that the bill will increase the budget deficit and the US debt, which stands at over $36.6 trillion.

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The GBP/USD exchange rate rose after Jerome Powell hinted that the Fed may start cutting interest rates as soon as in its July meeting. In a statement at a European Central Bank (ECB) meeting, Powell said that the bank's decision will be based on the incoming data on inflation and the labor market.

One of these numbers will come out later today, July 2, when ADP publishes the private payrolls report. Economists expect the data to show that the economy created 95,000 jobs in June, up from 37k in the previous month.

This report will come a day before the US releases the official NFP data. The average estimate is that the economy created 110,000 jobs in June, down from 139,00 in May, while the unemployment rate was stuck at 4.2%.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The GBP/USD exchange rate remained unchanged at 1.3740 on July 2, the highest level in years. The current level is along the upper side of the ascending channel, whose upper side connects the highest swings since April 21.

It has remained above the 50-day and 25-day Exponential Moving Averages (EMA), a sign that bulls are in control. The MACD and the Relative Strength Index (RSI) have continued rising, a sign that it has momentum.

Therefore, the pair will likely continue rising as bulls target the next key resistance level at 1.3850. A drop below the psychological point at 1.3600 will invalidate the bullish view.

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