The GBP/USD price is in a tight range after Rishi Sunak delivered his annual budget yesterday. The GBPUSD is trading at 1.3955, which is where it was yesterday.
What happened: In a speech yesterday, Rishi Sunak explained the key UK government priorities. Some of the key proposals he submitted are extending the stamp duty relief and the furlough program until September. He also announced a stimulus package for high street retailers and an increase of corporate taxes to 25%. The GBP/USD did not react to the speech since most of these proposals were already public.
Looking ahead: There will be no major economic data from the UK today. The only major release will be by Markit, which will release the construction PMI data. While this is an important figure, it tends not to move the GBP/USD price.
Traders will instead pay close attention to the weekly initial jobless claims data from the United States that will come a day before the official jobs data. Also, the pair will react to a speech by Jerome Powell later today.
The two-hour chart shows that the GBP/USD price dropped to 1.3857 last week. It then bounced back but found a substantial resistance at 1.400. A closer look at this price action shows that the pair has formed an inverted head and shoulders pattern. It is also at the same level as the 25-period and 15-period moving averages.
Therefore, in my view, there is a possibility that the price will resume the upward trend. To do this, bulls will need to move above the 1.400 resistance level. However, if it drops below the head at 1.3860, this prediction will be invalidated.