GBP/USD soars on emerging bullish-engulfing pattern

Disappointing Concern for the US economy is raised by the New York Empire State Manufacturing Index’s sharp decline to -31.3. According to Biden and Brainard, “serious and constructive” discussions are taking place over raising the US debt ceiling.

The BoE recently increased rates by 25 basis points to combat inflation; future labour market statistics may indicate another increase in June. As a bullish-engulfing technical pattern develops, the GBP/USD price rises above 1.2500 and recovers from the bottom of the previous week at 1.2443. The recovery of the GBP/USD appears to be the result of factors such a weak US Dollar (USD) and demand for riskier assets. The GBP/USD exchange rate is 1.2515 at this time.

According to the US Economic Agenda, the New York Empire State Manufacturing Index fell 31.3 points instead of the expected -3.9, disappointing investors. According to the research, about 50% of survey participants indicated that the business environment had gotten worse. The information showed that the orders index decreased, a price gauge increased, and the employment component decreased.

Despite the fact that the news was bad for the US economy, a slowdown in hiring means that the labour market is loosening. However, a price increase would necessitate additional Fed (US Federal Reserve) activity, which would result in higher rates. On the day of the release, the GBP/USD lost momentum after the release, most likely due to the data as well as technical resistance near the day’s high.

The US debt ceiling continues to dominate headlines in addition to the statistics. Joe Biden, the vice president of the United States, said that negotiations were “moving along,” while Lael Brainard, the national economic director, said that they were serious and productive.