Current trend

The GBP/USD pair is trading with an upward trend, testing the level of 1.2550 for a breakout. The "bullish" activity at the end of the week remains quite restrained, as trading participants are in no hurry to open new positions ahead of today's publication of the April US labor market report. Analysts forecast a decline in Nonfarm Payrolls from 303.0 thousand to 243.0 thousand, while Average Hourly Earnings are likely to adjust from 4.1% to 4.0% in annual terms and may add 0.3% in monthly terms. In turn, the Unemployment Rate, according to preliminary estimates, will remain at 3.8%. In addition, April business activity statistics from S&P Global will be presented: the UK Services PMI is expected to remain at 54.9 points, and the US indicator at 50.9 points.

The Bank of England's Monetary Policy Committee will meet on Thursday, May 9, where interest rates are likely to be kept at 5.25%, as the Consumer Price Index fell to 3.2% in March and is expected to approach the regulator’s target value of 2.0% after the next reduction in energy costs. Meanwhile, annual shop price inflation slowed down to 0.8% in April, down from 1.3% in the previous month, according to the British Retail Consortium (BRC).

Investors evaluate statistics on jobless claims in the United States, which were published the day before: Initial Jobless Claims for the week ended April 26 remained at the level of 208.0 thousand with expectations of 212.0 thousand, and Continuing Jobless Claims for the week ended April 19 remained at around 1.774 million, while experts were counting on 1.800 million.

Support and resistance

On the D1 chart, Bollinger Bands are actively reversing to the ascending plane. The price range expands from above, freeing a path to new local highs for the "bulls". MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, having left the overbought area at the beginning of the week, again reverses towards growth, signaling the restrained potential of the "bulls" in the ultra-short term.

Resistance levels: 1.2550, 1.2600, 1.2650, 1.2690.

Support levels: 1.2500, 1.2465, 1.2400, 1.2311.

Trading tips

Long positions can be opened after a breakout of 1.2550 with the target of 1.2650. Stop-loss — 1.2500. Implementation time: 2-3 days.

A rebound from 1.2550 as from resistance, followed by a breakdown of 1.2500 may become a signal for opening of new short positions with the target at 1.2400. Stop-loss — 1.2550.