GBP/USD Price Analysis – March 10, 2023

Daily Price Outlook

The GBP/USD pair traded around 1.1916 on early Friday as bulls paused after the largest daily gain in over a week. Significant data releases are expected from both the UK and the US.

Upcoming US Economic Data

Federal Reserve Chairman Jerome Powell has emphasized the need for more interest rate hikes to control inflation, citing stronger-than-expected economic figures showing continuing inflationary pressures.

However, rising jobless claims have lessened the tightness of the labor market, despite positive ADP data on Wednesday and more job openings than anticipated. Thursday's data showed weekly jobless claims were 211K more than the projected 195K.

Despite these US statistics, the US Dollar's rise has been halted by a risk-off sentiment. The US Dollar Index (DXY) is edging downwards at 105.28 before the release of major US statistics such as average hourly earnings, nonfarm employment change, and unemployment rate. Additionally, US 10-year Treasury bond rates are falling to 3.874 ahead of the jobs report.

Traders are anticipating the US Nonfarm Payrolls data, which could lessen the Federal Reserve's requirement to tighten conditions more quickly if the data is downbeat and shows rising jobless claims.

UK GDP Report and GBP/USD Exchange Rate Outlook

Market participants are waiting for the UK's GDP report release. While the market is anticipating a 0.1% increase in January's GDP, which is a significant improvement over December's 0.5% fall, the possibility of a recession in the first half of the year remains a topic of debate.

The Bank of England's ability to control inflation, which has remained high at 10.1% even after lifting the cash rate to 4.00%, will be crucial in determining how much the economy will shift.

However, Bank of England (BoE) policymaker Swati Dhingra cautioned against interest rate hikes on Wednesday, stating that over-tightening poses a more significant concern. Since the BoE appears less hawkish than the Fed, an expected relaxation in UK macroeconomic data today may allow GBP/USD bears to resurface.

GBP/USD Intraday Technical Levels

Support      Resistance

1.1858         1.1967

1.1790         1.2008

1.1749         1.2076

Pivot Point: 1.1899

GBP/USD – Technical Outlook

The GBPUSD pair tested the resistance level of 1.1940, remaining stable below it as the EMA50 added more strength to the resistance. The pair will likely continue its downward correctional wave with a target of 1.1625.

The Stochastic indicators show clear negative signals, suggesting a potential decline in upcoming sessions, as the pair trades within a bearish channel depicted on the chart.

Therefore, our bearish outlook remains valid and active. It is important to note that if the pair breaches the 1.1940 and 1.2020 levels, the expected decline may be halted, and the price could begin to recover.