GBP/USD Price Analysis – March 01, 2023

Daily Price Outlook

The GBP/USD pair is currently trading at 1.2039, showing a 0.16% increase in the last 24 hours. According to a report released on February 28th, the Chicago Purchasing Managers' Index (PMI) fell from 44.3 in January to 43.6 in February, which is below the expected level of 45.

This marks the second consecutive month of decline. In addition, the Conference Board's Consumer Confidence Index dropped from 106 in January to 102.9 in February, falling short of the expert estimate of 108.5.

Exploring the Impact of Softer US Data on GBP/USD Exchange Rates

On February 28th, a report revealed that the Chicago Purchasing Managers' Index (PMI) fell from 44.3 in January to 43.6 in February, falling short of the expected level of 45 for the second consecutive month. Additionally, the Conference Board's Consumer Confidence Index dropped from 106 in January to 102.9 in February, failing to meet the expert estimate of 108.5.

These figures indicate increased pressure from rising interest rates. As a result, traders are anticipating a potential increase in the federal funds rate from 525 bps to 550 bps by the Federal Reserve. The upcoming release of February business activity numbers on March 1st and 3rd will be closely watched by investors. It is expected that the US manufacturing sector may continue to decrease, which would reverse the growth seen in the services industry.

Currently, the US Dollar Index is trading around a two-month high versus a basket of currencies at approximately 105.00.

An Overview of the UK Economy

The UK's positive financial performance has continued to support a progressive increase in sentiment, as seen in recent trends. Today, the final UK Manufacturing Purchasing Managers' Index (PMI) numbers for February will be released, followed by a speech from Bank of England (BoE) Governor Andrew Bailey, highlighting today's economic calendar for the GBP. The Composite PMI Index is expected to rise from 48.5 to 53.0 points this month, with a projection of 49.0.

Hawkish statements from BoE policymakers may potentially drive the currency higher, and the Pound may gain if Bailey signals that additional measures are required to bring inflation back within the BoE's target range. Conversely, if he expresses concerns about growth, it would dampen hopes for a BoE interest rate rise, weakening the pound.

Windsor Framework

The UK and EU have recently agreed on the 'Windsor Framework,' as announced by Prime Minister Rishi Sunak and President of the European Commission Ursula von der Leyen on February 27th. Sunak stated that the new Brexit agreement focuses on 'what is best for people in Northern Ireland,' rather than politicians.

This new agreement to resolve the conflict around the Northern Ireland protocol has contributed to the Pound's recent gains.

GBP/USD Intraday Technical Levels

Support      Resistance

1.1983         1.2114

1.1932         1.2194

1.1851         1.2245

Pivot Point: 1.2063

GBP/USD – Technical Outlook

On a technical front, the GBP/USD currency pair has gained immediate support at the 1.2015 level. The closing of candles above this level is driving a bullish bounce, which could potentially lead the GBP price toward an immediate resistance level of 1.2045.

This particular resistance level is driven by a double-top pattern that has extended even in the past. Breaking above the 1.2145 level could potentially send the GBP/USD price further upward.