Forex. Trading forecast and signal for GBP/USD for today, April 20
The British Pound rose sharply in price against Dollar and reached the price value of 1.3975.
GBP is rising against the backdrop of optimistic market sentiment and falling US treasury yields. At the same time, analysts remain confident that this trend can change, as sustainable consumption in the United States is seen as a catalyst for global growth. The changes may come because of President Joe Biden's plans for infrastructure spending. If its $2.25 trillion program gets a boost, it could trigger a bond sell-off, leading to higher yields and a rapid appreciation of the Dollar. Moreover, Biden wants to raise corporate taxes, and this also favors safe-haven assets.
Analysts at JP Morgan bank note that they expect the dollar to strengthen and consider the current decline in the US currency, along with a decline in US securities yields, as a corrective movement in an increasing trend. The bank says the recent rate move was largely technical and temporary, and notes strong economic data and an acceleration in the spread of vaccines in the United States. And it is also assumed that the Fed may mention a potential reduction in asset purchases in the minutes of the April FOMC meeting. President Joe Biden's $2 trillion budget plan is also expected to be announced later this month. All this will help to maintain the gap between US economic growth and the rest of the world. Analysts at JP Morgan recommended maintaining long positions in the dollar against currencies where central banks are likely to maintain loose monetary policy or face difficulties with economic growth. The bank's list includes the euro, Japanese yen, Swiss franc, and British Pound.
GBP/USD Trading Signal
The forecast assumes a corrective reversal and a decline in Pound/Dollar to 1.3900.