Fundamental analysis of GBPUSD

A brief overview of economic developments:

UK:

The Bank of England raised its rate by 0.25% to 4.5% at its latest meeting. This supports the British currency, but inflationary pressures, which are the main reason for the rate hike, persist in both the US and the UK.

In addition, a positive trend in the British economy is the growth of business activity in the country, as well as the pace of significant GDP growth in April.

US:

It will not be easy for the U.S. Federal Reserve to pause in its act of monetary restriction in June as inflation continues to rise. The current 5% annualized rate (statistics released in May) is the highest level in 13 years. This may force the U.S. regulator to go on a path of continuous rate hikes.

The impact of the macroeconomic statistics:

The WASDE (World Agricultural Supply and Demand Estimates) report, which will be published today at 19:00 (GMT+3) will not have a significant impact on the pair's dynamics

Technical analysis and scenarios:

Key levels:

Support levels: 1.23655, 1.24245, 1.24680, 1.24970

Resistance levels: 1.25510, 1.26220, 1.26630

Stochastic Oscillator: At 84.3936, the pair GBP/USD is overbought and this might signal a potential down-trend reversal.

Bollinger Bands: The GBP/USD is testing the upper Bollinger Band, which might indicate for a possible downside move. However, a widening of the bands indicates a possible rise in volatility.

MACD: The MACD value is above the signal line, which is a bullish signal, indicating a possible continuation of the uptrend.

Main scenario: If the GBP/USD pair can overcome the resistance level at 1.25510, this could lead to further strengthening to the next resistance level at 1.26220. Take profit can be set at this level and stop loss at the support level of 1.24970.

Alternate scenario: If the GBP/USD pair deviates from the resistance level at 1.25510, this could lead to a decline to the support level at 1.24970. If this level is broken, the next support level will be 1.24680. In that case, take profit can be set at 1.24680 and stop loss at the resistance level of 1.25510.