Published on May 8, 2023

Daily Analysis For GBP/USD 08-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
00:50	(Japan) BoJ Monetary Policy Meeting Minutes	Medium	JPY
01:00	(France) Victory in Europe Day	None	EUR
01:00	(United Kingdom) Bank Holiday for the coronation of King Charles III	None	GBP
01:30	(Japan) Jibun Bank Services PMI	Medium	JPY
01:30	(Japan) Jibun Bank Composite PMI	Low	JPY
02:30	(Australia) Building Permits MoM	Medium	AUD
02:30	(Australia) Private House Approvals MoM	Low	AUD
02:30	(Australia) Building Permits YoY	Low	AUD
02:30	(Australia) NAB Business Confidence	High	AUD
06:00	(Estonia) Inflation Rate YoY	Low	EUR
06:00	(Estonia) Inflation Rate MoM	Low	EUR
06:00	(Estonia) CPI	Low	EUR
07:00	(Finland) Balance of Trade	Low	EUR
07:00	(Germany) Industrial Production MoM	Medium	EUR
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(Greece) Balance of Trade	Low	EUR
10:30	(Germany) 3-Month Bubill Auction	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Industrial Production MoM	Low	EUR
11:00	(Latvia) Industrial Production YoY	Low	EUR
15:00	(El Salvador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate MoM	Low	USD
15:00	(United States) Wholesale Inventories MoM	Low	USD
16:00	(United States) Consumer Inflation Expectations	Low	USD
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
23:45	(New Zealand) Electronic Retail Card Spending MoM	Low	NZD
23:45	(New Zealand) Electronic Retail Card Spending YoY	Low	NZD

Today's Scenario: - The GBP/USD pair has confidently risen above the significant resistance level of 1.2600 in the early European trading session. The Cable has reached a new 11-month high at 1.2614 and may continue to experience further gains, as the US Dollar Index (DXY) is expected to display more downside amid several headwinds.

S&P500 futures have shown remarkable gains in Asia as investors focus on optimism influenced by the Federal Reserve's (Fed) neutral interest rate guidance. US equities had been consistently in the bearish territory for the past three trading sessions due to renewed fears of a US banking crisis, potential concerns over the US debt ceiling, and uncertainty surrounding the Federal Reserve's plans to combat persistent inflation.

In summary, the GBP/USD pair has risen confidently above the crucial resistance level of 1.2600 and has reached an 11-month high. The US Dollar Index (DXY) is expected to decline further due to various factors. Furthermore, investors are showing optimism about the future, influenced by the Federal Reserve's neutral interest rate guidance.

Buy Scenario: - On the upside, the May 2022 high of around 1.2665 represents immediate resistance for the Cable pair buyers to overcome to restore market confidence. Following this, the 1.2700 round figure may encourage the GBP/USD bulls before guiding them towards the April 2022 lows around 1.2975.

In summary, the GBP/USD pair is treading water around 1.2630 amid market anxiety ahead of key UK data/events. The pair's recent bullish momentum is challenged by the overbought RSI (14) line and the easing of the bullish MACD bias. Till we do not advise to buy GBP/USD.

Sell Scenario: - The short-term GBP/USD sellers are also teased by the overbought RSI (14) line and the recent easing of the bullish MACD bias. Nevertheless, the 1.2600 round figure turned support restrains the short-term downside of the GBP/USD pair. The upward-sloping support line from mid-March and the 200-SMA near 1.2500 and 1.2430, respectively, are crucial to watch as a break of these levels may prompt the pair sellers. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -