Published on May 9, 2023

Daily Analysis For GBP/USD 09-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
00:01	(United Kingdom) BRC Retail Sales Monitor YoY	High	GBP
00:30	(Japan) Overtime Pay YoY	Low	JPY
00:30	(Japan) Average Cash Earnings YoY	Low	JPY
00:30	(Japan) Household Spending MoM	Low	JPY
00:30	(Japan) Household Spending YoY	Low	JPY
01:00	(Euro Area) Anniversary of Robert Schumans Declaration	None	EUR
01:00	(Luxembourg) Europe Day	None	EUR
02:30	(Australia) Retail Sales MoM	High	AUD
04:00	(China) Exports YoY	Medium	CNY
04:00	(China) Imports YoY	Medium	CNY
04:00	(China) Balance of Trade	High	CNY
04:35	(Japan) 10-Year JGB Auction	Low	JPY
04:35	(Japan) 6-Month Bill Auction	Low	JPY
07:00	(Lithuania) CPI	Low	EUR
07:00	(Lithuania) Inflation Rate MoM	Low	EUR
07:00	(Lithuania) Inflation Rate YoY	Low	EUR
07:00	(United Kingdom) Halifax House Price Index YoY	Medium	GBP
07:00	(United Kingdom) Halifax House Price Index MoM	Medium	GBP
07:45	(France) Current Account	Low	EUR
07:45	(France) Balance of Trade	Medium	EUR
07:45	(France) Exports	Low	EUR
07:45	(France) Imports	Low	EUR
08:00	(Slovakia) Balance of Trade	Low	EUR
08:30	(France) Foreign Exchange Reserves	Low	EUR
09:00	(Euro Area) ECB Lane Speech	Low	EUR
09:40	(Spain) 6-Month Letras Auction	Low	EUR
09:40	(Spain) 12-Month Letras Auction	Low	EUR
10:30	(Germany) 5-Year Bobl Auction	Low	EUR
10:30	(Australia) 2023-24 Federal Budget	Medium	AUD
11:00	(United Kingdom) BBA Mortgage Rate	Low	GBP
11:00	(Ireland) Industrial Production YoY	Low	EUR
11:00	(United States) NFIB Business Optimism Index	Low	USD
13:30	(United States) Fed Jefferson Speech	Medium	USD
13:55	(United States) Redbook YoY	Low	USD
14:00	(France) 3-Month BTF Auction	Low	EUR
14:00	(France) 12-Month BTF Auction	Low	EUR
14:00	(France) 6-Month BTF Auction	Low	EUR
15:00	(United States) IBD/TIPP Economic Optimism	Medium	USD
15:30	(United States) NY Fed Treasury Purchases 0 to 1 yrs	Low	USD
17:05	(United States) Fed Williams Speech	Medium	USD
18:00	(United States) 3-Year Note Auction	Low	USD
18:00	(Euro Area) ECB Schnabel Speech	Low	EUR
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - Following a sharp correction, the GBP/USD pair is currently establishing a cushion near the round-level support of 1.2600 in the Asian session. The Cable has managed to prevent further downside as the US Dollar Index (DXY) has been unable to extend its upward trajectory despite a recent increase to nearly 101.50.

S&P500 futures in Asia are showing minor losses, indicating a cautious risk outlook ahead of the negotiations between the White House and top Republican leaders regarding the US debt ceiling. As negotiations for a debt ceiling raise are expected to be heated, the US Dollar index (DXY) is displaying indications of volatility contraction. Republicans are anticipated to withhold approval of the deal unless significant cuts in President Biden's spending initiatives are promised.

Buy Scenario: - GBP/USD remained defensive near 1.2620 after pulling back from a 13-month high. The pair has retreated from the 78.6% Fibonacci Expansion (FE) level of its moves from April 03 to May 02, reflecting overbought RSI (14) conditions.

Conversely, to convince GBP/USD buyers, it is necessary to have a daily closing beyond the mid-2022 peak of around 1.2665, as well as the 78.6% FE level of near 1.2675. Even so, the 1.2700 round figure can prompt the pair's further upside.

If the GBP/USD bulls manage to keep control past 1.2700, the March 2022 lows of around the 1.3000 psychological magnet will become the focus of the market. Till we do not advise to buy GBP/USD.

Sell Scenario: - As GBP/USD failed to provide a daily closing above the May 2022 peak of around 1.2665 and pulled back from the key FE level amid overbought RSI, the pair is expected to continue its latest retreat.

The resistance line from early April, near 1.2580 by the press time, has gained market attention as the pair's inability to move past the 21-day Exponential Moving Average (EMA) around the 1.2500 mark could challenge GBP/USD bears.

However, if the pair's weakness persists beyond 1.2500, it could direct the pair towards the previous monthly bottom of around 1.2275, with a break of which could welcome the bears. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -