GBPUSD quotes have stabilized on Tuesday as the market assesses the Federal Reserve (Fed) officials' comments made on Monday.
According to Richmond Fed President Thomas Barkin, the current level of interest rates should help bring inflation down to the 2% target. According to New York Fed President John Williams, the rates will be cut eventually. He highlighted the slowdown in job growth, given the overall economic situation.
Today, Minneapolis Fed President Neel Kashkari is expected to speak. His comments will help traders to assess the current market situation. Investors have factored into their forecasts that the Fed will cut rates by 46 basis points by the end of 2024. The first cut is expected in September or November, according to the LSEG data.
Meanwhile, European markets are awaiting the Bank of England's (BOE) decision on monetary policy on Thursday. Policymakers are expected to prepare the ground for a 25-basis-point rate cut from the current 5.25% at the meeting on June 20, similar to the European Central Bank. The ECB has repeatedly announced a possible rate cut as early as June.
GBPUSD quotes showed a technical pullback from the level of 1.2300. At the same time, no well-defined trend is formed on the higher timeframes.
In terms of wave analysis, the price is forming the second ascending wave on the H2 timeframe. However, the Relative Strength Index (RSI) indicator (standard values) shows a possible change in the course direction and shift to the third descending wave, which is confirmed by the current divergence.
Signal:
The short-term outlook for the GBPUSD pair suggests selling.
The target is at the level of 1.2330.
Part of the profit should be taken near the level of 1.2470.
A stop-loss could be placed at the level of 1.2675.
The bearish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
