GBP/USD Price Analysis – April 28, 2023
Daily Price Outlook
After a robust rally on Thursday, the GBP/USD remains unchanged in Tokyo as the brief decline persists. The bulls are currently seeking fresh momentum at the previous resistance level of 1.2500, which they consider to be close to a 10-month high.
The financial market volatility experienced this week was driven by investors' uncertainty over whether the ongoing US banking issues and the persistent deadlock surrounding the debt ceiling would ultimately bolster the US dollar.
Ahead of the announcement of the first estimate of Q1 gross domestic product and the weekly initial jobless claims report on Thursday, investors shifted away from the dollar.
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The report revealed that personal consumer spending rose by 4.2%, offsetting weaker readings for other components after a 1% increase. The US economy is anticipated to have expanded by 2% in Q1, following a 2.6% growth in the previous quarter. Nevertheless, inflation persisted at high levels.
The US GDP Price Index experienced an annualized growth of 4.0% in the first quarter, suggesting that inflation is more elevated than initially anticipated. Core inflation increased by 4.9%.
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Nonetheless, it's crucial to remember that if the GBP/USD pair continues to decline beyond 1.2360, it could easily drop to the monthly low of approximately 1.2275.
After a two-day consecutive gain, the GBP/USD is gradually approaching the significant resistance level, hovering near 1.2500 during the early hours of Friday's Asian session.
In doing so, the cable pair explains the better Relative Strength Index (RSI), set at 14, not being overbought, and the previous day's rally from the 100-bar Simple Moving Average (SMA).
Economist Lee Sue Ann and Markets Strategist Quek Ser Leang of UOB Group expect that after 1.2550 is cleared, the upward rate in GBP/USD will pick up speed.
GBP/USD – Technical Outlook
On Friday, the GBP/USD currency pair displays a slight bullish inclination around the 1.2487 mark. At the moment, it encounters substantial resistance at the 1.2505 level, which is apparent on the four-hourly chart. This specific resistance level is strengthened by a triple top pattern within the same timeframe.
Examining the technical indicators, both the RSI and MACD are situated in the purchasing zone, and the 50-day exponential moving average (EMA) further indicates a buying tendency. The EMA remains around the 1.2470 mark, with the closing of candles above this particular EMA line promoting an upward movement in GBP.
Upon widening the view on the four-hourly chart, the GBP/USD currency pair has developed an ascending triangle pattern, which generally breaks out in a bullish direction. Consequently, the strategy for today is to seek a buying position above a support level of 1.2445. A bullish break above the 1.2505 resistance level could propel sterling towards the subsequent resistance level of 1.2550. Conversely, if GBP falls below 1.2445, it might aim for the 1.2399 level.
Related:
* AUD/USDPrice Analysis – April 28, 2023
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