Forex. GBP/USD trading forecast and signal for today, May 5, 2021
The British Pound again declined in price against the US Dollar. On Tuesday, the quotes fell to the level of 1.3890.
The index of business activity in the UK manufacturing sector rose to the level of 60.9 points-this is slightly higher than forecasts. As a result, GBP lost a minimum in price, despite the strengthening of demand for USD. The country's economy is recovering rapidly, and this allows the Pound to hold its position. Only an insufficiently rapid increase in inflation in the UK can lead to new measures of the Bank of England to ease monetary policy, which will cause the collapse of the Pound. It is the uncertainty of the regulator's further actions that keeps GBP from further growth.
The U.S. economy fell slightly short of forecasts, growing 6.4% year-on-year in the first quarter. A full business recovery and further stimulus will lead to double-digit growth in the second quarter. In this case, US GDP growth will be higher at the end of the year than it would have been before the pandemic. The US economy has already received $5 trillion in stimulus thanks to measures taken by Presidents Trump and Biden. In the future, it is planned to increase spending by another 4 trillion Us Dollars, which will be partially offset by tax increases. These volumes are equivalent to about 40% of the country's GDP, so it is not surprising that the US economy shows such results.
Trading signals for the GBP/USD forex pair for today May 5, 2021
In the forecast, the GBP/USD is expected to decline to the support levels of 1.3870, 1.3850 and 1.3825.