GBP/USD Price Analysis – April 11 2023
Daily Price Outlook
Yesterday's trading activity in the GBP/USD pair resulted in a fall, with the price falling below the bullish channel's support line. This signaled the beginning of a retracement of the upward trend that had begun around 1.1800; the next objective is 1.2250.
The bearish trading trend is likely to persist today, and if the price drops below 1.2355, achieving the forecasted drop will be much simpler. The bearish correction will end, and the primary bullish trend will resume if the price rises above 1.2440.
On Tuesday, GBP/USD's expected trading range is between 1.2300 support and 1.2460 resistance levels.
GBPUSD Trade Idea
Entry Price – Buy Above 1.2400
Stop Loss – 1.2340
Take Profit – 1.2490
Risk to Reward – 1 : 1.5
Profit & Loss Per Standard Lot = +$900/ -$600
Profit & Loss Per Micro Lot = +$900/ -$60
Related:
* AUD/USD Price Analysis – April 11, 2023
GBP/JPY Price Analysis – April 10 2023
Daily Price Outlook
On Monday, the GBP/JPY pair traded with a slightly bearish bias under 164.700, which has been extended by a triple top pattern. This pattern is causing difficulty for the GBP/JPY pair and keeping it bearish under this level.
Additionally, the formation of a Doji and Shooting Star candles under the 164.700 mark is adding downward pressure.
Meanwhile, the RSI and MACD indicators are in an overbought zone, giving investors another reason to short the currency pair and take profits. Please see the trade idea below.
GBP/JPY Trade Idea
Entry Price – Sell Below 164.750
Stop Loss – 165.50
Take Profit – 163.850
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = +$266/ -$250
Profit & Loss Per Micro Lot = +$26/ -$25
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* GOLD Price Analysis – April 10, 2023
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
GBP/USD Price Analysis – March 23, 2023
Daily Price Outlook
The GBP/USD pair is currently trading up 0.52% at 1.2328. The currency pair has surged to seven-week highs due to a higher UK Consumer Price Index (CPI), which reaffirms a potential rate hike from the Bank of England (BoE). The USD has declined due to the Federal Reserve's dovish interest rate policy.
Fed Raises Rates, But Takes Dovish Stance
On Wednesday, the Federal Reserve increased its benchmark funds rate by 25 basis points to the range of 4.75% - 5.00%. However, it dropped its language about ongoing increases in favor of monitoring how the banking crisis affects the economy.
Fed Chair Jerome Powell reiterated the FOMC's commitment to getting inflation back to its 2% target. However, the market assumed that the central bank's terminal rate was near, despite the Fed increasing interest rates as expected and reaffirming its inflation control commitment.
The Fed raised interest rates while softening its tone towards tightening monetary policy, indicating that it may eventually consider halting to avoid further economic hardship.
This caused the value of the dollar against a basket of currencies to drop to its lowest level in seven weeks, with the Dollar Index (DXY) down 0.25% at 102.09. This resulted in an increase in the GBP/USD pair.
All Eyes on Bank of England (BoE) as UK Inflation Surges and Interest Rate Decision Looms
Regarding the UK, the GBP/USD is expected to remain strong as the Bank of England (BoE) prepares to increase rates for the eleventh consecutive time. Despite recent economic estimates suggesting a less hawkish stance, the BoE may be swayed towards more hawkish rate increases following the unexpected increase in UK inflation reported on Wednesday through the UK CPI Report.
In February, the country's annual inflation rate rose unexpectedly from 10.1% to 10.4%, with analysts predicting it to be 9.9%. This has created policy uncertainty, with market analysts expecting BoE Governor Andrew Bailey to raise interest rates by 25 basis points due to rising food and non-alcoholic beverage prices, and increasing energy expenses.
GBP/USD Intraday Technical Levels
Support Resistance
1.2202 1.2331
1.2140 1.2398
1.2073 1.2459
Pivot Point: 1.2269
GBP/USD – Technical Outlook
Yesterday, the GBPUSD pair showed positive trades and attempted to surpass the 1.2300 resistance level. However, it faced solid resistance there, and traders are anticipating further gains in upcoming sessions. The price is currently moving within a bullish channel on the chart, and the next target is expected to be around 1.2440.
To reach the mentioned target, the price needs to gain positive momentum. The EMA50 indicates that the bullish trend may continue within the channel. The expected range for today's trading is between 1.2210 support and 1.2390 resistance.
Related:
* BTC/USD Price Analysis – March 23, 2023
GBP/USD Price Analysis – March 16, 2023
Daily Price Outlook
The GBP/USD is currently trading around 1.2067. Following a sell-off triggered by reports of internal issues at Credit Suisse, the pair attempted a rebound move.
Federal Reserve Rate Hike Bets Lose Steam Amid Falling US Inflation and Credit Suisse Crisis
In the US, concerns about the potential harm caused by the Federal Reserve's aggressive rate hike cycle have grown following the collapse of Silicon Valley Bank (SVB), and bets on rate increases have been muted due to a decrease in inflation to 6%, which was in line with expectations. Market participants now expect the central bank to exercise caution regarding potential hikes, and the CME Group FedWatch Tool shows an 82% chance of a 25 basis point interest rate increase.
Furthermore, disappointing US retail sales and lower Producer Price Index (PPI) numbers suggest a noticeable decline in US inflation, which has significantly reduced hawkish Federal Reserve (Fed) bets.
As a result, the US Dollar Index (DXY) has corrected following the decline in hawkish bets and is currently trading at 104.64, while the US 10-year treasury bond is trading at 3.496%. The GBP/USD currency pair's decline has been limited by the weakening dollar.
UK Chancellor Hunt presents significant tax and benefit reforms in the Spring Budget
Meanwhile, in the United Kingdom, Chancellor of the Exchequer Jeremy Hunt announced significant reforms to the UK tax and benefit system to encourage firms to invest, attract individuals to return to work, and boost the economy out of stagnation.
In addition, Credit Suisse's biggest investor declared it was unable to offer the Swiss bank any more financial support, which prompted the CEO of the Swiss bank to provide new guarantees concerning the stability of the institution's finances. According to the Telegraph, Bank of England (BoE) officials were discussing the possible impact of the issues at Credit Suisse, a systemically important firm linked with the global financial system.
Worries about the European banking system were reinforced by unfortunate news from Swiss lender Credit Suisse, and investors' risk-off sentiment is still on the rise as a result. Therefore, the United Kingdom's Finance Minister (FM) Jeremy Hunt failed to support the British Pound with the financial budget, putting pressure on GBP/USD.
GBP/USD Intraday Technical Levels
Support Resistance
1.1989 1.2162
1.1913 1.2259
1.1817 1.2335
Pivot Point: 1.2086
GBP/USD – Technical Outlook
The GBP/USD pair made an attempt to break the minor support level at 1.2060, but it consolidated above it, keeping the possibility of resuming the bullish trend on an intraday basis. The next main target is expected to be at 1.2260.
Stochastic is providing clear positive signals, supporting the expectation of a rise in the upcoming sessions. Breaking 1.2145 would make it easier to achieve the anticipated positive targets.
It is important to note that breaking 1.2060 would push the price to decline and test the most significant support at 1.1940 before any new positive attempts.
The expected trading range for today is between 1.2000 support and 1.2160 resistance.
GBP/USD Price Analysis – March 14, 2023
Daily Price Outlook
The GBP/USD is currently trading at 1.2151, which reflects a decrease of 0.25% in the last 24 hours. As traders anticipate significant economic data releases from the US and the UK, the pair is restricted to its recent trading highs.
Upcoming UK Macroeconomic Data
The upcoming UK employment statistics release is expected to have a significant impact on the British Pound in the days ahead. According to experts, the Claimant Count Change (Feb) is predicted to decrease by 12.4K, which is slightly less than the previous announcement of 12.9K. However, the three-month unemployment rate may rise to 3.8% from the previous release of 3.7%.
The Average Earnings data is expected to be the primary driver, with a predicted decrease to 5.7% from the previous release of 5.9%.
Investors must exercise caution as the UK economy faces inflationary pressures from rising labor costs and persistent increases in food prices. A decrease in UK employment costs and an increase in the unemployment rate could potentially reduce inflation expectations.
Despite this, the Pound is struggling to gain momentum due to investor concerns about risks to the UK financial system, leading to lower risk sentiment. However, if the Average Earnings Index and Claimant Count Change exceed expectations, it could potentially benefit the GBP/USD pair.
US Upcoming CPI
Following the fallout of SVB US on Friday, the US markets saw a significant decline. Despite emergency measures implemented by US authorities over the weekend to mitigate risk and restore confidence in the US banking system, investors remain uneasy today.
Although the risk-off sentiment initially supported the USD, markets have reduced their expectations for the Federal Reserve to raise interest rates. The US banking industry is displaying signs of instability due to high-interest rates, which could make Fed officials hesitant to implement further tightening measures.
Traders are currently anticipating Tuesday's US CPI release. According to market forecasts, the US CPI is expected to fall 6.0% YoY from 6.4%, while the CPI ex-Food & Energy might decline to 5.5% YoY from 5.6%.
As investors await the US CPI data, the dollar has risen again, with DXY up 0.25% on the day and trading at 103.86. The 10-Year US Treasury Rate in the bond markets was at 3.569%. Furthermore, if the US CPI comes in below expectations, it could strengthen the GBP/USD pair.
GBP/USD Intraday Technical Levels
Support Resistance
1.2081 1.2242
1.1980 1.2302
1.1919 1.2404
Pivot Point: 1.2141
GBP/USD – Technical Outlook
The GBPUSD pair has remained relatively unchanged since this morning and is hovering around the 1.2150 level. The expected bullish trend scenario for today remains unchanged, targeting the 1.2260 and 1.2440 levels as the next main stations. However, a positive motive is needed to push the price towards the suggested targets.
It is important to note that the continuation of the bullish wave depends on the price staying stable above 1.2070. The expected trading range for today is between 1.2070 support and 1.2250 resistance.
GBP/USD Price Analysis – March 13, 2023
Daily Price Outlook
The GBP/USD is trading at 1.2062, up 0.28%in 24 hours.The pair gained momentum, rebounding substantially from recent losses as investors bet that the Federal Reserve will soften its hawkish rhetoric in the coming days in response to a growing banking crisis in the US.
Federal Reserve Board of Governors urgent meeting
The Federal Reserve Board of Governors scheduled an urgent closed-door meeting using expedited protocols on Monday, March 13. The Board reviewed and decided the advance and discount rates that the Fed would impose.
The unexpected collapse and FDIC seizure of Silicon Valley Bank (SVB) Financial Group on Friday may have caused this hurried Fed meeting. The Fed used emergency steps to make borrowing easier for troubled banks. The White House also informed Silicon Valley Bank depositors that it would cover all withdrawals. Jerome Powell and his allies rushed in to help with a new tool to save the billionaire tech depositors at SVB and Signature Bank against hawkish threats of a 50bps rise.
Moreover, in March, the odds of a 50bps rise fell from 75% to less than 20%, and in May, the probability of a 25bps hike fell from a coin flip to only 85%. As a result, the dollar dropped significantly versus a basket of currencies, with DXY trading 0.23% down at 104.33. US 10-Year Bond Yield is now trading at 3.737, up 1.14%.
The unexpected fall in the dollar helped the GBP/USD currency pair to gain value.
UK and US Economic Conditions
British economic growth in January exceeded expectations, relieving concerns about a possible recession. Britain's GDP grew 0.3% month over month, following a 0.5% decline in December. According to a Reuters survey of economists, growth would be 0.1%.
In the United States, Nonfarm Payrolls revealed significant job growth last week, despite the rise in the Unemployment Rate and signs of cooling wage inflation, leading investors to lower expectations that the Federal Reserve will hike interest rates as sharply as expected.
Going ahead, traders are awaiting the US consumer price index and UK labor market data on Tuesday. BoE will especially appreciate slower wage growth following last month's positive surprise. However, with US CPI released, market reaction may be limited unless there is a significant surprise.
GBP/USD Intraday Technical Levels
Support Resistance
1.2044 1.2108
1.2010 1.2138
1.1980 1.2171
Pivot Point: 1.2074
GBP/USD – Technical Outlook
The GBPUSD pair is currently exhibiting a bullish bias and hovering around the 1.2100 level. For the bullish trend to continue as anticipated, a positive catalyst is needed to push the price towards its next target at 1.2260.
To achieve the expected targets, we recommend maintaining a bullish trend that relies on price stability above 1.2050. Breaking below this level will result in a price decline towards 1.1940 before any new positive attempts. Today's anticipated trading range is expected to fall between support at 1.2040 and resistance at 1.2200.
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.
GBP/USD Price Analysis – March 08, 2023
Daily Price Outlook
The GBP/USD currency pair has failed to stop its previous declines and is still flashing red around the $1.1810 mark amidst ongoing Brexit uncertainties and chatter from the Federal Reserve regarding future monetary policy.
At present, the GBP/USD currency pair is trading within a relatively tight range of 1.1810 to 1.1842, with the current price at 1.1831, indicating a lack of decisive market movements. Ongoing Brexit uncertainties and mixed signals from the US Federal Reserve may be contributing to this trend.
Brexit has been a major driver of the GBP/USD pair's poor performance, as investors remain concerned about the UK's future relationship with the European Union. The lack of progress on these issues has resulted in GBP losses and affected the pair's overall performance.
Additionally, the Bank of England's monetary policy stance has played a role in the GBP/USD pair's performance. The central bank has been under pressure to support the UK economy during the COVID-19 pandemic and has implemented a range of monetary policy tools, such as interest rate cuts and asset purchases.
Feds Hawkish Stance & Bullish US Dollar
Recently, the US Federal Reserve has taken a hawkish tone, suggesting that interest rates may be raised sooner than originally anticipated. This has led to a stronger US dollar, as traders anticipate tighter monetary policy in the future, reinforced by positive economic indicators such as lower unemployment and increasing inflation.
The bullish US dollar has an impact on other currencies, including the GBP/USD pair, as traders adjust their strategies in response to changing market conditions. This hawkish approach and strong US currency suggest the possibility of a shift in the global economic environment in the coming months.
On Wednesday, the US dollar strengthened against a basket of currencies, reaching its highest level in three months. The dollar index and dollar index futures both rose by 0.2%, hitting their best levels since early December. The reasons for the dollar's rise are not entirely clear, but it may be due to global economic uncertainty and market volatility, as well as the Federal Reserve's hawkish tone and the strength of the US economy.
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
The GBPUSD pair has strongly broken the 1.1940 level and is currently hovering around the 1.1800 level, indicating a return to the bearish correctional track. Further expected declines are likely on an intraday and short-term basis, with our next target at 1.1625.
As such, we anticipate continued bearish trend dominance in the upcoming trading sessions, bolstered by the negative pressure from the EMA50. However, there may be some temporary sideways fluctuation due to the current positivity of stochastic before the expected decline resumes.
It should be noted that breaking through the 1.1940 level would halt the current negative pressure and initiate new recovery attempts. Today's projected trading range is between 1.1720 support and 1.1890 resistance.
GBP/USD Price Analysis – March 07, 2023
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 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.