Daily Analysis For GBP/USD  09-05-2023

Daily Analysis For GBP/USD 09-05-2023

GBP/USD Analysis
Economic Events and Scenario for GBP/USD
Economic Events: -
00:01(United Kingdom) BRC Retail Sales Monitor YoYHighGBP
00:30(Japan) Overtime Pay YoYLowJPY
00:30(Japan) Average Cash Earnings YoYLowJPY
00:30(Japan) Household Spending MoMLowJPY
00:30(Japan) Household Spending YoYLowJPY
01:00(Euro Area) Anniversary of Robert Schumans DeclarationNoneEUR
01:00(Luxembourg) Europe DayNoneEUR
02:30(Australia) Retail Sales MoMHighAUD
04:00(China) Exports YoYMediumCNY
04:00(China) Imports YoYMediumCNY
04:00(China) Balance of TradeHighCNY
04:35(Japan) 10-Year JGB AuctionLowJPY
04:35(Japan) 6-Month Bill AuctionLowJPY
07:00(Lithuania) CPILowEUR
07:00(Lithuania) Inflation Rate MoMLowEUR
07:00(Lithuania) Inflation Rate YoYLowEUR
07:00(United Kingdom) Halifax House Price Index YoYMediumGBP
07:00(United Kingdom) Halifax House Price Index MoMMediumGBP
07:45(France) Current AccountLowEUR
07:45(France) Balance of TradeMediumEUR
07:45(France) ExportsLowEUR
07:45(France) ImportsLowEUR
08:00(Slovakia) Balance of TradeLowEUR
08:30(France) Foreign Exchange ReservesLowEUR
09:00(Euro Area) ECB Lane SpeechLowEUR
09:40(Spain) 6-Month Letras AuctionLowEUR
09:40(Spain) 12-Month Letras AuctionLowEUR
10:30(Germany) 5-Year Bobl AuctionLowEUR
10:30(Australia) 2023-24 Federal BudgetMediumAUD
11:00(United Kingdom) BBA Mortgage RateLowGBP
11:00(Ireland) Industrial Production YoYLowEUR
11:00(United States) NFIB Business Optimism IndexLowUSD
13:30(United States) Fed Jefferson SpeechMediumUSD
13:55(United States) Redbook YoYLowUSD
14:00(France) 3-Month BTF AuctionLowEUR
14:00(France) 12-Month BTF AuctionLowEUR
14:00(France) 6-Month BTF AuctionLowEUR
15:00(United States) IBD/TIPP Economic OptimismMediumUSD
15:30(United States) NY Fed Treasury Purchases 0 to 1 yrsLowUSD
17:05(United States) Fed Williams SpeechMediumUSD
18:00(United States) 3-Year Note AuctionLowUSD
18:00(Euro Area) ECB Schnabel SpeechLowEUR
21:30(United States) API Crude Oil Stock ChangeMediumUSD

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: -
S1 1.2598-R1 1.2654
S2 1.2578-R2 1.2689
S3 1.2543-R3 1.2710


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