Forex Analysis & Reviews: Overview of the GBP/USD pair on April 19th. The Bank of England may lower the rate in May

The GBP/USD currency pair remained stagnant on Thursday. In the EUR/USD article, we used the phrase that the British currency "remains flat even after exiting the flat." Let's explain what it means. The British pound traded in a sideways channel of 1.25-1.28 (approximate boundaries) for 4 months. Last week saw the long-awaited breakthrough below the lower boundary; after that, nothing happened. The super-overbought pound still has yet to decline despite the UK economy being in a recession, and the Bank of England might start easing monetary policy much sooner than the market expects. The pound is reluctant to depreciate, despite the excellent condition of the US economy, labor market, and business activity. The market refuses to buy the dollar, despite the Fed's hawkish policy stance and the absence of inflation slowdown overseas. Thus, the GBP/USD pair is currently trading illogically. In essence, we are still determining the completion of the flat on the 24-hour timeframe. Yes, the pair has exited the sideways channel, but on the 4-hour timeframe, it has been stationary for a week now. Some may argue that this week's macroeconomic backdrop is weak, hence the pair's almost immobilized state. We consider such an opinion erroneous, as at least two events in the past few days should have moved the price off dead center. Inflation in the UK is approaching levels where it would be appropriate for the central bank to start discussing monetary policy easing. Jerome Powell made it clear that any rate cuts in the near future are out of the question.

Analysis are provided by InstaForex.

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