The GBP/USD continued its rebound on Friday after the relatively weak US nonfarm payroll numbers and the Bank of England (BOE) decision. The pair is trading at 1.3733, which is a few pips below the year-to-date high of 1.3756.
British pound gaining
The British pound rebounded last week after the BOE delivered its first interest rate decision of the year. The bank left interest rate and quantitative easing policy unchanged as most analysts were expecting.
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Also, it downgraded the outlook of the economy because of the ongoing wave of the virus. However, in a statement the central bank governor said that negative interest rates were not necessary, pushing the GBP/USD higher.
On Friday, the weak US employment numbers provided more catalyst for the GBP/USD price. The data showed that the American economy added just 40,000 jobs in January meaning that the economy still has more than 10 million more jobs to fill. The unemployment rate dropped to 6.3%, which is still above the pre-pandemic low of 3.8%.
Therefore, later this week, the GBP/USD will react to the American inflation numbers that will come out on Wednesday. Economists polled by Reuters expect the data to show that the overall CPI rose by 1.5% in January.
Also, the pair will react to the ongoing debate about stimulus in the US. In a statement during the weekend, Janet Yellen said that the US economy will go back to full-employment if the government passes the $1.9 trillion stimulus. Still, it is too early to determine whether the Senate will pass the stimulus package.
Meanwhile, the GBP/USD will be affected by the UK GDP numbers that will come out on Friday. Economists see the UK economy contracting by 8.1% in the fourth quarter because of the lockdowns.
GBP/USD technical outlook
On the four-hour chart, we see that the GBP/USD attempts to start a new bearish trend faded on Thursday after the BOE decision. The pair is now trading at 1.3735, which is slightly below the important level of resistance at 1.3756. The price is still slightly above the 25-day and 15-day exponential moving averages.
Therefore, the outlook for the pair is neutral. If it crosses the resistance at 1.3756, it will mean that bulls have prevailed. As a result, they will target the next resistance at 1.3800.
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