Forex. GBP/USD trading forecast for today, May 28, 2021
On Friday, the British currency rose sharply against the dollar and reached the resistance level of 1.4200. The quotes are in close proximity to the maximum multi-year value of 1.4234.
The Pound has slowed down recently, but is still one of the most sought-after currencies in the G10. The political problems of Prime Minister Boris Johnson have become a certain constraint on the British currency. His former aide, Dominic Cummings, said on Thursday that Johnson was not fit for the post. According to Cummings, the UK Department of Health was completely unprepared for the pandemic, as, indeed, were other Western governments that failed during the crisis.
Bank of England spokesman Gertjan Vliege on the outlook for monetary policy said that the lower limit of negative rates is in the range of -0.5% to -0.75%, and in some cases even lower. According to the official, if the country's economy needs more incentives, negative rates will become a relevant and important tool. Whether additional quantitative easing is required depends on the state of the markets. However, the latest data from the UK shows that the Central Bank is more likely to think about tightening, rather than easing monetary policy.
Signals for trading GBP/USD currency pair
In our forecast, we assume a reversal and a pullback of the Pound/Dollar pair to the levels of 1.4175, 1.4150 and 1.4130.