Forex forecast and signals for GBP/USD for May 3, 2021
British currency fell sharply against the dollar to the support level of 1.3800. Economic growth in the United States accelerated significantly in the first quarter, and this provided a rise in the exchange rate of USD against other assets. GBP/USD turned around from a one-week high and fell to the lowest level in two weeks. Since the end of February, the pair has been trading in a wide range of 1.3675-1.4000 and is now moving towards the lower border again. Economic growth in the US will be a strong driver for the pair, especially if there are no surprises at the Bank of England meeting next Thursday.
The British regulator may change the dynamics of the Pound at the meeting on May 6, as it is likely to remain optimistic about the country's economic recovery. In recent weeks, the UK data also indicates a fairly strong growth. The April business activity indices in manufacturing and in the service sector rose and showed a positive impact of the easing of quarantine restrictions. Retail sales data for March indicate a likely strengthening of demand at the end of the first quarter. If the Bank of England hints at a possible tightening of monetary policy earlier than expected, then GBP will receive serious support and will again be able to test resistance at the upper limit of the 1.4000 range.
Trading signals for the GBP/USD currency pair
The forecast assumes a decline in GBP/USD to the levels of 1.3775, 1.3750 and 1.3720.