GBP/USD Price Analysis – June 23, 2023

Daily Price Outlook

The GBP/USD pair failed to react positively to the favorable UK Consumer Confidence data despite the Bank of England’s (BoE) significant rate hike. The Pound Sterling experienced a second consecutive day of decline, reaching an intraday low of 1.2725 in the early hours of Friday.

The GfK Consumer Confidence in the UK improved to -24 in June, the highest level since January 2022, surpassing expectations of -26. The data suggests that the British economy has managed to avoid recession concerns thus far.

Additionally, consumer sentiment regarding the economy in the next 12 months improved to -25 from -30 in May, while views on personal finances increased by seven points to -1.

However, concerns about a potential recession induced by the BoE’s rate hike continue to weigh on the GBP/USD pair. Despite the surprise 50 basis points rate increase by the BoE, the OIS price of the BoE peak rate signals that the tightening cycle might end sooner than anticipated.

Furthermore, the rate hike highlights the economic challenges amidst discussions of a British recession, contributing to the downward pressure on the Pound Sterling.

The GBP/USD pair experienced volatility during the release of UK CPI data, initially finding support but later reversing gains as investors questioned the BoE’s ability to effectively manage inflation without harming the economy.

GBP/USD Price Chart – Source: Tradingview

GBP/USD – Technical Analysis

The GBP/USD pair encounters challenges in confirming a return to its main bullish channel, resulting in a bearish rebound and the initiation of a bearish correctional wave on an intraday basis.

The pair is poised to test the 1.2675 level initially, with a potential breakthrough signaling further decline towards 1.2580 and 1.2515 as key support levels.

As a result, a bearish bias is anticipated for today, although breaking above 1.2790 would negate the negative outlook and guide the price back to its main bullish track.

The trading range for the day is projected between the support level of 1.2620 and the resistance level of 1.2790.