The news background of the U.S. has more influence on the GBPUSD pricing than the U.K. fundamentals.
Chairman of Interest Rates at the Bank of England and a member of the Monetary Policy Committee, Jonathan Haskell, said in an interview today that interest rates will continue to rise while inflation remains high. His words slightly strengthened the pound, as well as published positive statistics on British retail sales.
Negotiations on raising the U.S. debt ceiling are still in the focus of the market. U.S. President Joe Biden and Republican Leader Kevin McCarthy are close to an agreement on the U.S. debt ceiling. The parties diverge by only $70 billion in discretionary spendings.
It is expected that instead of a bill in hundreds of pages, there will be a shortened agreement with a few key figures, such as discretionary expenditures.
Controlled spendings of the U.S. reached $1.7 trillion in 2022, amounting to 27% of total spendings of $6.27 trillion. About half of this amount is for defense.
According to sources, probably, the final agreement will impose restrictions on future negotiations about the budget, and will not define detailed expenditures.
The dollar is strengthening amid the hesitation of the U.S. authorities, as the country may default on June 1.
The U.S. currency is also supported by a hawkish sentiment of the Federal Reserve System (Fed), which aims to fight against persistent inflation. In case of increasing interest rates at the U.S. central bank meeting in June, the dollar may continue rising. Today's publication of the U.S. Consumer Spending Index at 11:30 GMT should clarify the situation. Forecasts say that annual expenditures by Americans should fall by 3.9%, which is 0.3% lower than the previous figure. Confirmation of the forecast could decrease the value of the U.S. dollar in the short term.
The GBPUSD pair is in a downward corrective corridor on the H1 timeframe. Today's news background could boost the price of the currency pair to the trend resistance.
As long as the GBPUSD is in a descending channel, it is advisable to consider a sell trade. The optimal point to sell is near the level of 1.2385.
The short-term prospects for the GBPUSD pair are to sell around the level of 1.2385.
The target is at the level of 1.2295.
Part of the profit should be fixed near the level of 1.2335.
The stop-loss is at the level of 1.2430.
Bearish trend has a short-term character, so the volume of trade should not exceed 2% of your balance.