Technical Analysis

GBP/USD Price Analysis – March 07, 2023

By LonghornFX Technical Analysis
Mar 7, 20233 min

Daily Price Outlook

The GBP/USD pair is currently trading at 1.2045, reflecting a 0.20% increase in the past 24 hours. The pair has been supported by the weakness of the US dollar.

UK Construction Sector Sees Fastest Economic Activity Growth in February

The UK construction sector experienced a significant increase in overall economic activity in February after a two-month decline. The UK PMI construction index rose to a 9-month high of 54.1 in February from 48.4 in January, surpassing consensus expectations of 49.1.

The commercial construction sector performed the best in February with an index of 55.3, showing the fastest increase in nine months. Civil engineering activities also increased in February (index 52.3), but at a slower pace.

Based on the latest data, employment levels in the construction industry have seen a slight increase. Furthermore, the significant rise in output in the previous month presents a positive outlook for the construction industry as a whole. This data has had a positive impact on the GBP, indicating that the UK's construction industry is improving.

US Economy

In the US, inflationary pressures have put Jerome Powell, the head of the Federal Reserve, in the spotlight as he prepares to address Congress today. Powell is expected to provide an update on the state of the US economy and discuss the central bank's plans for monetary policy.

In addition, the non-farm payroll data for February is set to be released on Friday. It is expected to show a significant drop compared to January, bringing job openings back to the typical range of around 200,000. If the data meets expectations, it could indicate a tight labor market, thereby strengthening the US dollar.

The US dollar has weakened against a range of global currencies prior to Powell's testimony and the release of the jobs report. The DXY is currently trading lower, around 104.23. However, if Powell's tone becomes more hawkish, it may strengthen the dollar and increase expectations for the US interest rate movement.

 GBP/USD Price Chart - Source: Tradingview

GBP/USD Intraday Technical Levels

Support      Resistance

1.1997         1.2052

1.1967         1.2079

1.1941         1.2108

Pivot Point: 1.2023

GBP/USD – Technical Outlook

From a technical perspective, the GBP/USD pair has found support at the 1.2015 level, and a bullish rebound may occur if candles close above this level.

The pair may face immediate resistance at the 1.2045 level, driven by a double-top pattern that has persisted in the past.

A break above the 1.2145 level may lead to further upward movement in the GBP/USD price.



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