Published on May 4, 2023

Daily Analysis For GBP/USD 04-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
01:00	(Japan) Greenery Day	None	JPY
01:00	(Latvia) Declaration of Independence Day	None	EUR
01:01	(Ireland) AIB Services PMI	Low	EUR
02:30	(Australia) Exports MoM	Low	AUD
02:30	(Australia) Imports MoM	Low	AUD
02:30	(Australia) Balance of Trade	High	AUD
02:45	(China) Caixin Manufacturing PMI	High	CNY
06:00	(Estonia) Industrial Production MoM	Low	EUR
06:00	(Estonia) Industrial Production YoY	Low	EUR
07:00	(Germany) Balance of Trade	High	EUR
07:00	(Germany) Exports MoM	Medium	EUR
07:00	(Germany) Imports MoM	Low	EUR
08:00	(Spain) Unemployment Change	High	EUR
08:00	(Spain) Tourist Arrivals YoY	Low	EUR
08:15	(Spain) S&P Global Services PMI	High	EUR
08:15	(Spain) S&P Global Composite PMI	Low	EUR
08:45	(Italy) S&P Global Services PMI	High	EUR
08:45	(Italy) S&P Global Composite PMI	Low	EUR
08:50	(France) S&P Global Services PMI	Medium	EUR
08:50	(France) S&P Global Composite PMI	Low	EUR
08:55	(Germany) S&P Global Services PMI	High	EUR
08:55	(Germany) S&P Global Composite PMI	Low	EUR
09:00	(Euro Area) S&P Global Composite PMI	Low	EUR
09:00	(Euro Area) S&P Global Services PMI	High	EUR
09:00	(United Kingdom) New Car Sales YoY	Low	GBP
09:30	(United Kingdom) S&P Global/CIPS UK Services PMI	High	GBP
09:30	(United Kingdom) Net Lending to Individuals MoM	Low	GBP
09:30	(United Kingdom) Mortgage Approvals	Medium	GBP
09:30	(United Kingdom) Mortgage Lending	Medium	GBP
09:30	(United Kingdom) BoE Consumer Credit	Medium	GBP
09:30	(United Kingdom) S&P Global/CIPS Composite PMI	Low	GBP
09:40	(Spain) Index-Linked Obligacion Auction	Low	EUR
09:40	(Spain) Obligacion Auction	Low	EUR
09:40	(Spain) Bonos Auction	Low	EUR
09:40	(Spain) 3-Year Bonos Auction	Low	EUR
10:00	(France) New Car Registrations YoY	Low	EUR
10:00	(Cyprus) Inflation Rate YoY	Low	EUR
10:00	(Cyprus) Inflation Rate MoM	Low	EUR
10:00	(Euro Area) PPI MoM	Low	EUR
10:00	(Euro Area) PPI YoY	Low	EUR
10:00	(France) 10-Year OAT Auction	Low	EUR
11:00	(Ireland) Unemployment Rate	Low	EUR
12:30	(Germany) New Car Registrations YoY	Low	EUR
12:30	(United States) Challenger Job Cuts	Low	USD
13:15	(Euro Area) Marginal Lending Rate	Low	EUR
13:15	(Euro Area) Deposit Facility Rate	High	EUR
13:15	(Euro Area) ECB Interest Rate Decision	High	EUR
13:30	(Canada) Imports	Low	CAD
13:30	(Canada) Exports	Low	CAD
13:30	(Canada) Balance of Trade	High	CAD
13:30	(United States) Unit Labour Costs QoQ	Medium	USD
13:30	(United States) Nonfarm Productivity QoQ	Medium	USD
13:30	(United States) Jobless Claims 4-week Average	High	USD
13:30	(United States) Continuing Jobless Claims	High	USD
13:30	(United States) Initial Jobless Claims	High	USD
13:30	(United States) Balance of Trade	High	USD
13:30	(United States) Exports	Medium	USD
13:30	(United States) Imports	Medium	USD
13:45	(Euro Area) ECB Press Conference	High	EUR
15:00	(Canada) Ivey PMI s.a	High	CAD
15:30	(United States) EIA Natural Gas Stocks Change	Low	USD
15:30	(United States) NY Fed Treasury Purchases TIPS 1 to 7.5 yrs	Low	USD
16:30	(United States) 8-Week Bill Auction	Low	USD
16:30	(United States) 4-Week Bill Auction	Low	USD

Today's Scenario: - In the early Tokyo session, the GBP/USD pair is approaching the significant resistance level of 1.2600. This bullish momentum can be attributed to the Federal Reserve's decision to adopt the language of other central banks. Fed Chair Jerome Powell's statement indicating that further monetary policy decisions will be based on data suggests that the central bank has reached an intermediate terminal rate for now.

Meanwhile, S&P500 futures are indicating further losses in early Asia after a bearish settlement. US equities surrendered their early gains in the New York session due to uncertainty over the Fed's strategy to control inflation. This market sentiment has weakened the demand for risk-sensitive assets.

Buy Scenario: - GBP/USD bulls need to break above the three-week-old ascending resistance line, currently around 1.2595, which could lead to resistance at the round figure of 1.2600 and the May 2022 peak of around 1.2665 before directing buyers towards the 1.2700 round figure.

Overall, the GBP/USD pair is still on the bullish trajectory, even if the potential for further upside appears limited. Till we do not advise to buy GBP/USD.

Sell Scenario: - The GBP/USD pair has eased slightly to around 1.2580, after hitting the highest levels since June 2021 in early Thursday trading. The pair initially rallied in response to the US Federal Reserve's dovish hike before retreating from an upward-sloping resistance line from April 14.

Given the pullback from the short-term key resistance line and the overbought RSI (14), the GBP/USD price may experience further downward pressure. However, an ascending trend line from Tuesday near 1.2525 is likely to provide immediate support.

If the GBP/USD bears push the price below this trend line, the 200-hour moving average support around 1.2485 could come into play. If the pair continues to decline, the weekly low of 1.2435 may act as the last defense for buyers. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -