- The GBP/USD price analysis indicates caution ahead of the UK budget reading.
- Data revealed that the PMI of UK services increased from 51.0 to 53.2.
- Data indicated a jump in business activity in the US.
The GBP/USD price analysis indicates caution ahead of this week’s UK budget reading. However, the dollar remained on the front foot after upbeat US data and news of some tariff relief. On the other hand, an upbeat UK services PMI kept the pound from sliding considerably against the dollar.
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Market participants are eagerly awaiting a budget update from Rachel Reeves. Moreover, experts believe she will signal lower spending given the recent poor performance in the UK economy. However, an upbeat business activity report on Monday revealed some bright spots in the economy that might relieve the Finance Minister.
Notably, data revealed that the services PMI increased from 51.0 to 53.2, beating estimates. The report kept the pound from falling against a broadly stronger dollar.
The greenback had a strong rally after data indicated a jump in business activity in the US. The composite PMI rose from 51.6 to 53.5. The upbeat report eased fears of a recession. At the same time, demand for the dollar rose after Trump said he would exempt some countries from the April tariffs. The news helped ease trade war fears, improving sentiment.
GBP/USD key events today
Traders are not looking forward to any high-impact data from the UK or the US. Therefore, they will keep absorbing recent releases and US tariff developments.
GBP/USD technical price analysis: Bears pause below SMA, next target at 1.2851
On the technical side, the GBP/USD price trades below the 30-SMA, with the RSI under 50, indicating a bearish bias. However, the price currently trades in a tight range. The bias recently shifted after the previous bullish trend halted near the 1.3000 key psychological level.
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Since the uptrend broke above the 1.2851 resistance, the price started sticking close to the SMA, indicating weaker momentum. At the same time, the RSI made a bearish divergence, signaling a looming reversal. After this divergence, bulls had little strength to challenge the 1.3000 key resistance level.
As a result, bears returned to push the price below the SMA and the RSI below 50. Currently, they are targeting the 1.2851 support level. A break below this level would strengthen the bearish bias. Moreover, it would allow GBP/USD to reach the 1.2700 support.
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