GBP/USD: UK Budget Update Boosts Pound Sterling Outlook
The Pound Sterling (GBP) maintains its strength following the release of the UK's 2024 budget statement. Chancellor of the Exchequer Jeremy Hunt announced positive revisions to Gross Domestic Product (GDP) growth forecasts for 2024, now projected at 0.9% by the Office for Business Responsibility (OBR). This upward adjustment builds on an initial forecast of 0.8% set in November. The Conservative Party prioritizes a reduction in the budget deficit, aiming for 1.2% by 2028-29.
The Conservative Party's announced two-percentage-point cut to National Insurance Contributions (NICs) is expected to provide relief to UK taxpayers, saving average earners approximately £450 this year, and a total of £900 when combined with last year's cuts. In the US, Federal Reserve (Fed) Chair Jerome Powell emphasized that the path to reaching the 2% inflation target remains uncertain, hinting at potential rate cuts later this year.
Recent trading activity shows the Pound Sterling in a holding pattern for the past two months. The GBP/USD pair may see a decisive move following the UK budget announcement. Technical analysis reveals a Descending Triangle pattern on the daily timeframe, with support near the 1.2500 level. A break above the pattern's descending trendline could signal significant upside potential. The Relative Strength Index (RSI) is approaching 60.00, suggesting building bullish momentum.
Recent trading activity shows the Pound Sterling in a holding pattern for the past two months. The GBP/USD pair may see a decisive move following the UK budget announcement. Technical analysis reveals a Descending Triangle pattern on the daily timeframe, with support near the 1.2500 level. A break above the pattern's descending trendline could signal significant upside potential. The Relative Strength Index (RSI) is approaching 60.00, suggesting building bullish momentum.