Forex Trading

GBP/USD Signal Today – 16/05: Bullish Gain Steam (Chart)


Bullish view

  • Buy the GBP/USD pair and set a take-profit at 1.2750.
  • Add a stop-loss at 1.2600.
  • Timeline: 1-2 days.

Bearish view

  • Set a sell-stop at 1.2670 and a take-profit at 1.2600.
  • Add a stop-loss at 1.2740.

GBP/USD Signal Today - 16/05: Bullish Gain Steam (Chart)

The GBP/USD bullish momentum continued this week as it jumped to its highest swing since April 10th after the mixed US economic reports. The pair soared to a high of 1.2675 as the US dollar index sell-off gained steam.

Key Fed speakers ahead

The focus among traders on Thursday will be the upcoming statements by key Federal Reserve officials like Patrick Harker, Raphael Bostic, and Loretta Mester.

These statements will be important because they will come after the US published mixed inflation and retail sales numbers. The headline and core inflation numbers dropped to 0.4% in April, the first monthly decline in over 6 months.

On an annual basis, the figures came in at 3.4% and 3.6%, meeting analysts estimates. These numbers are still significantly higher than the Federal Reserve estimate of 2.0%.

Another report revealed that the country’s retail sales stalled in April, signaling that the economy is slowing. The value of retail sales, dropped from 0.6% in March to 0.0% in April. Notably, 7 of the 13 categories tracked dropped during the month.

The report came a few weeks after another related report showed that consumer confidence tumbled to its lowest level since 2022. Highly confident consumers spend more money and vice versa. The Empire State manufacturing index tumbled to minus 15.60 in May from the previous minus 14.6.

Therefore, today’s Fed speakers will react to these numbers and provide their opinion on when the Fed will start to cut interest rates. Already, most economists believe that the Bank of England will start to slash rates in June.

The other key GBP/USD news on Thursday will be the upcoming US industrial and manufacturing production numbers. The US will also release the latest housing starts and building permits reports, which will provide more information about the US economy.

GBP/USD technical analysis

The GBP/USD pair started the new bull run on April 22nd after it formed a morning star candlestick pattern at 1.2298. It has now crossed the important resistance level at 1.2635, its highest swing on May 3rd.

The pair also jumped above the Woodie pivot point and the 50-day moving average, a sign that bulls are in control. It is also nearing the first resistance of the pivot point. The Relative Strength Index (RSI) and the Stochastic Oscillator have continued rising.

Therefore, the pair will likely continue rising as bulls target the key level at 1.2890, its highest level on March 8th. To do that, bulls will need to cross the first Woodie resistance point and the psychological point at 1.2695.

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