Published on May 5, 2023

Daily Analysis For GBP/USD 05-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
01:00	(Japan) International Children's Day	None	JPY
01:00	(Netherlands) Liberation Day	None	EUR
02:30	(Australia) Home Loans MoM	Medium	AUD
02:30	(Australia) Investment Lending for Homes	Medium	AUD
02:30	(Australia) RBA Statement on Monetary Policy	Medium	AUD
02:45	(China) Caixin Composite PMI	Low	CNY
02:45	(China) Caixin Services PMI	High	CNY
06:45	(Switzerland) Unemployment Rate	High	CHF
07:00	(Germany) Factory Orders MoM	Medium	EUR
07:30	(Switzerland) Inflation Rate MoM	Low	CHF
07:30	(Switzerland) Inflation Rate YoY	Medium	CHF
07:30	(Switzerland) CPI	High	CHF
07:45	(France) Industrial Production MoM	Medium	EUR
07:45	(France) Private Non Farm Payrolls QoQ	Low	EUR
08:00	(Austria) Wholesale Prices YoY	Low	EUR
08:00	(Austria) Wholesale Prices MoM	Low	EUR
08:00	(Austria) Balance of Trade	Low	EUR
08:00	(Slovakia) Retail Sales YoY	Low	EUR
08:00	(Slovakia) Retail Sales MoM	Low	EUR
08:00	(Spain) Industrial Production YoY	Low	EUR
08:00	(Switzerland) Foreign Exchange Reserves	Low	CHF
08:30	(Euro Area) S&P Global Construction PMI	Low	EUR
08:30	(France) S&P Global Construction PMI	Low	EUR
08:30	(Germany) S&P Global Construction PMI	Medium	EUR
08:30	(Italy) S&P Global Construction PMI	Low	EUR
09:00	(Italy) Retail Sales MoM	High	EUR
09:00	(Italy) Retail Sales YoY	High	EUR
09:30	(Slovenia) Balance of Trade	Low	EUR
09:30	(United Kingdom) S&P Global/CIPS Construction PMI	Medium	GBP
10:00	(France) New Car Registrations YoY	Low	EUR
10:00	(Euro Area) Retail Sales YoY	High	EUR
10:00	(Euro Area) Retail Sales MoM	High	EUR
11:00	(Luxembourg) Inflation Rate YoY	Low	EUR
11:00	(Luxembourg) Inflation Rate MoM	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
13:30	(Canada) Average Hourly Wages YoY	Low	CAD
13:30	(Canada) Full Time Employment Chg	Medium	CAD
13:30	(Canada) Part Time Employment Chg	Medium	CAD
13:30	(Canada) Participation Rate	Medium	CAD
13:30	(Canada) Employment Change	High	CAD
13:30	(Canada) Unemployment Rate	High	CAD
13:30	(United States) Manufacturing Payrolls	Low	USD
13:30	(United States) Nonfarm Payrolls Private	High	USD
13:30	(United States) Non Farm Payrolls	High	USD
13:30	(United States) Unemployment Rate	High	USD
13:30	(United States) Government Payrolls	Low	USD
13:30	(United States) Participation Rate	Medium	USD
13:30	(United States) Average Weekly Hours	Low	USD
13:30	(United States) Average Hourly Earnings MoM	Medium	USD
13:30	(United States) Average Hourly Earnings YoY	Medium	USD
14:30	(United States) Used Car Prices MoM	Low	USD
14:30	(United States) Used Car Prices YoY	Low	USD
15:00	(Ecuador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate MoM	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD
20:00	(United States) Consumer Credit Change	Low	USD

Today's Scenario: - In the early Asian session, the GBP/USD pair is exhibiting a back-and-forth motion, hovering around 1.2570. The Cable has become range-bound as investors await the release of the US Nonfarm Payrolls (NFP) data for further direction. Meanwhile, the US Dollar Index (DXY) has continued its rebound, reaching close to 101.45. Investors are concerned that positive employment data could prompt the Federal Reserve (Fed) to prolong its policy of tightening.

Buy Scenario: - GBP/USD bulls continue to dominate at levels not seen in 11 months, as they test a resistance line from a month ago near 1.2600 early on Friday. Despite a cautious mood due to the US Nonfarm Payrolls (NFP) data for April, the Cable pair has risen for the third straight day with modest gains.

As the Pound Sterling trades above the 21-day moving average (MA) support at 1.2470, buyers hope to overcome the immediate resistance. The bullish outlook is strengthened by the Relative Strength Index (RSI) (14) line, which remains above the 50 level but not overbought.

This puts the GBP/USD buyers in a good position to challenge the mid-2022 peak around 1.2665, which highlights the round figure of 1.2700. Till we do not advise to buy GBP/USD.

Sell Scenario: - However, a break below the 21-day MA support at 1.2470 is not a welcome sign for GBP/USD sellers as it faces resistance from an upward-sloping trend line from September 2022 and a descending trend line from late 2022, around 1.2320.

It is worth noting that the round figure of 1.2300 and August 2022 high of around 1.2290 add to the downside barriers for the Cable pair.

Overall, GBP/USD is likely to rise unless the US jobs report presents a positive surprise. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -