GBP/USD Price Analysis – March 29, 2023
Daily Price Outlook
The GBP/USD is trading at 1.2323, down by 0.14% in 24 hours. The currency pair fell, ending a two-day upswing, as consumer confidence in the US increased despite banking fears.
Customers Dismiss Banking Concerns
Consumer confidence in the United States increased in March, despite fears about banking crises and the consequences for deposits. It supports the idea of robust short-term consumer spending but significant challenges like increased borrowing prices and more difficult credit availability.
Tuesday's Conference Board data revealed that American consumer confidence increased in March. It rose from a previously revised 103.4 to 104.2 (consensus 101.0). Expectations increased from 70.4 to 73.0, while the existing situation index decreased from 153 to 151.1.
It is a surprise with the alarming news surrounding banks and worries about the security of savings within them. Instead, sentiment increased, attributed to decreased fuel prices, the ongoing labor market's strength, and growing wages.
Additionally, the recovery in sentiment suggests continued strong consumer spending growth in the foreseeable future, providing stable returns to the banking sector.
Traders adjusted their holdings in Treasuries and contributed to the front-end selloff as concerns about the possibility of an escalation of the financial upheaval subsided. As a result, the 10-year Treasury bond yield managed above 3.57%.
The move gave the American dollar financial assistance, as the Dollar Index (DXY) increased 0.12% to 102.55. GBP/USD fell from its highest levels since early February as the dollar strengthened, ending a two-day upswing.
Bailey on Banking Concern
In the UK, the Pound Sterling held up well after Bank of England (BoE) Governor Andrew Bailey left the door open for more policy tightening after raising rates by 25 basis points (bps) to 4.25% last week.
He said the local banking industry is robust and does not require special monetary treatment. Therefore, the central bank would keep concentrating on the battle against inflation. Hence, if there were indications of prolonged inflation, the BoE would welcome higher rates.
The UK economy's overall shop inflation, which had previously been reported at 8.4%, has now increased to 8.9%, the highest level in 18 years. If the BoE raises interest rates higher, it would support the GBP/USD.
GBP/USD Intraday Technical Levels
Support Resistance
1.2291 1.2359
1.2251 1.2389
1.2222 1.2428
Pivot Point: 1.2320
GBP/USD – Technical Outlook
The GBPUSD pair exhibits an increasing bullish bias, gradually moving away from the intraday bullish channel's support line. It continues to receive positive support from the EMA50, and we believe the path is clear to reach our next primary target at 1.2440.
Stochastic's current negativity explains the slow bullish wave, as it awaits positive momentum to assist in the continued rise towards the mentioned target.
Maintaining a level above 1.2280 is crucial for the continuation of the bullish trend, as breaking it will subject the price to intraday negative pressure, leading to some bearish correction before resuming the upward movement.
The expected trading range for today is between 1.2260 support and 1.2420 resistance.
Related:
* EUR/USD Price Analysis – March 29, 2023
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