FX.co ★ Forecast for GBP/USD on June 4, 2024

GBP/USD

Yesterday, the pound posted strong gains (exceeding 60 pips) on mixed US and Europe PMI data. The market is likely in a rush to form a technical divergence in order to change into a medium-term decline below 1.2300.

The price may not reach the target level of 1.2826, it may surpass this mark, but the main turning point will be the timing – Thursday – the European Central Bank's rate decision. If the main scenario is disrupted and the market goes up, then the first target will be the level of 1.2940.

On the 4-hour chart, the signal line of the Marlin oscillator made a false move below the boundary of the downtrend territory (blue oval). Now both the price and the oscillator are rising. However, the quote is already close to the target level of 1.2826, and today, the US will release a report on factory orders, with a forecast of 0.6%, so the growth is slowing down. In general, we await the ECB meeting on Thursday, as it will answer the question whether a reversal (according to the main scenario) will follow or the price will continue to rise (alternative).