GBP/USD ends week hitting fresh 7-month highs

Near the end of the week, GBP/USD broke above last week highs and climbed toward 1.3000. The pair reached at 1.2975, the highest level since September 30 and it remains near the top and closer to the 1.30 handle. The pair is now testing the 55-WMA that stands at 1.2970/80: the last time GBP/USD posted a weekly close above, was in 2015. 

Cable gained momentum on Friday after the release of the NFP report. Price broke the resistance around 1.2940/45 and continue to rise at a modest pace. It is about to post the fourth weekly gain in a row, supported by a weaker US dollar, UK economic data and expectation of a support to PM May at the June general elections. 

UK purchasing managers' indices offer comfort on growth - ING

US: April NFP report won't change minds – BBH

Week ahead

After a busy week, with the FOMC statement and NFP, next week in the US, investors will receive new information on inflation (PPI on Thursday and CPI on Friday), that is a relevant input for the next Fed meeting. 

In the UK, analysts from Danske Bank, point out that focus remains on politics, with the general election taking place June 8, “In terms of economic data releases, we have a rather quiet week ahead of us, with industrial production and construction output for March being the most important data. Also, the NIESR GDP estimate for April may be worth watching.”

The relevant event in the UK will be the Bank of England meeting. On Thursday the decision will be announced and will include the statement, the minutes, the Inflation Report and a press conference. “We do not expect BoE to make any policy changes so what is interesting is the policy stance”, said Danske analysts.