Published on May 10, 2023

Daily Analysis For GBP/USD 10-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
00:50	(Japan) Foreign Exchange Reserves	Low	JPY
01:00	(El Salvador) Mothers' Day	None	USD
05:30	(Netherlands) Manufacturing Production MoM	Low	EUR
06:00	(Estonia) Balance of Trade	Low	EUR
06:00	(Finland) Industrial Production YoY	Low	EUR
06:00	(Japan) Coincident Index	Low	JPY
06:00	(Japan) Leading Economic Index	Low	JPY
07:00	(Germany) Harmonised Inflation Rate YoY	Low	EUR
07:00	(Germany) Harmonised Inflation Rate MoM	Low	EUR
07:00	(Germany) Inflation Rate MoM	Medium	EUR
07:00	(Germany) Inflation Rate YoY	Medium	EUR
07:00	(Germany) CPI	High	EUR
07:00	(Lithuania) Balance of Trade	Low	EUR
08:00	(Austria) Industrial Production YoY	Low	EUR
08:00	(Slovakia) Industrial Production YoY	Low	EUR
09:00	(Italy) Industrial Production YoY	Low	EUR
09:00	(Italy) Industrial Production MoM	Medium	EUR
09:30	(Slovenia) Industrial Production YoY	Low	EUR
10:00	(Belgium) Industrial Production MoM	Low	EUR
10:00	(Belgium) Industrial Production YoY	Low	EUR
10:00	(Cyprus) Balance of Trade	Low	EUR
10:00	(Greece) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Greece) Inflation Rate YoY	Low	EUR
10:00	(Greece) Inflation Rate MoM	Low	EUR
10:00	(Greece) Industrial Production YoY	Low	EUR
10:00	(Malta) Balance of Trade	Low	EUR
10:00	(United Kingdom) 10-Year Treasury Gilt Auction	Low	GBP
10:10	(Italy) 12-Month BOT Auction	Low	EUR
10:30	(Germany) 30-Year Bund Auction	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Balance of Trade	Low	EUR
11:00	(Portugal) Balance of Trade	Low	EUR
11:00	(Portugal) Unemployment Rate	Low	EUR
12:00	(United States) MBA 30-Year Mortgage Rate	Medium	USD
12:00	(United States) MBA Mortgage Applications	Low	USD
12:00	(United States) MBA Mortgage Refinance Index	Low	USD
12:00	(United States) MBA Mortgage Market Index	Low	USD
12:00	(United States) MBA Purchase Index	Low	USD
13:30	(Canada) Building Permits MoM	Low	CAD
13:30	(United States) Inflation Rate MoM	Medium	USD
13:30	(United States) Core Inflation Rate MoM	Medium	USD
13:30	(United States) Inflation Rate YoY	High	USD
13:30	(United States) Core Inflation Rate YoY	High	USD
13:30	(United States) CPI	High	USD
13:30	(United States) CPI s.a	High	USD
15:30	(United States) EIA Refinery Crude Runs Change	Low	USD
15:30	(United States) EIA Crude Oil Stocks Change	Medium	USD
15:30	(United States) EIA Distillate Stocks Change	Low	USD
15:30	(United States) EIA Heating Oil Stocks Change	Low	USD
15:30	(United States) EIA Gasoline Production Change	Low	USD
15:30	(United States) EIA Crude Oil Imports Change	Low	USD
15:30	(United States) EIA Gasoline Stocks Change	Medium	USD
15:30	(United States) EIA Cushing Crude Oil Stocks Change	Low	USD
15:30	(United States) EIA Distillate Fuel Production Change	Low	USD
16:30	(United States) 17-Week Bill Auction	Low	USD
17:00	(Canada) 2-Year Bond Auction	Low	CAD
18:00	(United States) 10-Year Note Auction	Low	USD
19:00	(United States) Monthly Budget Statement	Medium	USD
23:45	(New Zealand) Food Inflation YoY	Low	NZD

Today's Scenario: - In the early Tokyo session, the GBP/USD pair is showing signs of a recovery and is aiming to surpass the immediate resistance level of 1.2630. This upward momentum is partly due to the uncertainty surrounding the US debt ceiling talks, which ended without any conclusion.

US President Joe Biden has mentioned that House Speaker Kevin McCarthy was not prepared to take the default option off the table. Further discussions are set to take place on Friday, which will bring US inflation back into the spotlight. The US Dollar Index (DXY) has continued its recovery, reaching a level near 101.65, as market participants expect US inflation to remain high.

Buy Scenario: - The GBP/USD currency pair has rebounded after testing the breakout region near 1.2600 of the Rising Channel chart pattern on a two-hour scale. This successful test of the Rising Channel breakout has instilled confidence in the strength of the breakout.

The 50-period Exponential Moving Average (EMA) at 1.2600 is providing support for the Pound Sterling bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has corrected and is now in the 40.00-60.00 range. An upward break into the 60.00-80.00 range would indicate bullish momentum.

Further recovery above the May 9 high at 1.2640 will push the currency pair towards the round-level resistance at 1.2700, followed by the April 26, 2022 high at 1.2772. Till we do not advise to buy GBP/USD.

Sell Scenario: - GBP/USD sellers manage to break through the immediate resistance-turned-support at around 1.2580, they will face a challenge from the convergence of an upward-sloping trend line from April 21 and the 21-day moving average (DMA) near 1.2500 before they can take control of the pair.

And also a reversal move below the May 5 low at 1.2561 will push the Cable towards the April 26 high at 1.2515, followed by the May 2 low at 1.2436. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -