Published on May 12, 2023

Daily Analysis For GBP/USD 12-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
04:00	(New Zealand) Business Inflation Expectations	Low	NZD
04:35	(Japan) 3-Month Bill Auction	Low	JPY
06:00	(Finland) Current Account	Low	EUR
07:00	(United Kingdom) Goods Trade Balance	High	GBP
07:00	(United Kingdom) GDP YoY	Low	GBP
07:00	(United Kingdom) Goods Trade Balance Non-EU	High	GBP
07:00	(United Kingdom) Industrial Production MoM	Medium	GBP
07:00	(United Kingdom) Industrial Production YoY	Low	GBP
07:00	(United Kingdom) Manufacturing Production MoM	Medium	GBP
07:00	(United Kingdom) Manufacturing Production YoY	Low	GBP
07:00	(United Kingdom) Construction Output YoY	Low	GBP
07:00	(United Kingdom) Balance of Trade	Low	GBP
07:00	(United Kingdom) GDP Growth Rate YoY	High	GBP
07:00	(United Kingdom) GDP Growth Rate QoQ	High	GBP
07:00	(United Kingdom) Business Investment QoQ	Medium	GBP
07:00	(United Kingdom) Business Investment YoY	Low	GBP
07:00	(United Kingdom) GDP MoM	High	GBP
07:00	(United Kingdom) GDP 3-Month Avg	Medium	GBP
07:00	(United Kingdom) Construction Orders YoY	Low	GBP
07:45	(France) Inflation Rate YoY	Medium	EUR
07:45	(France) Inflation Rate MoM	Medium	EUR
07:45	(France) Harmonised Inflation Rate MoM	Low	EUR
07:45	(France) Harmonised Inflation Rate YoY	Low	EUR
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Spain) CPI	High	EUR
08:00	(Spain) Core Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate MoM	Low	EUR
08:00	(Spain) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Spain) Harmonised Inflation Rate MoM	Low	EUR
08:00	(United States) Fed Bowman Speech	Medium	USD
09:00	(Euro Area) ECB Guindos Speech	High	EUR
10:00	(China) Current Account	Medium	CNY
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Current Account	Low	EUR
12:15	(United Kingdom) BoE Pill Speech	Medium	GBP
13:00	(United Kingdom) NIESR Monthly GDP Tracker	Low	GBP
13:30	(United States) Export Prices YoY	Low	USD
13:30	(United States) Import Prices YoY	Low	USD
13:30	(United States) Import Prices MoM	Medium	USD
13:30	(United States) Export Prices MoM	Medium	USD
13:45	(Germany) Current Account	Low	EUR
14:00	(Ecuador) Balance of Trade	Low	USD
15:00	(United States) Michigan Consumer Sentiment	High	USD
15:00	(United States) Michigan Inflation Expectations	Low	USD
15:00	(United States) Michigan Consumer Expectations	Low	USD
15:00	(United States) Michigan 5 Year Inflation Expectations	Low	USD
15:00	(United States) Michigan Current Conditions	Low	USD
15:30	(Canada) Senior Loan Officer Survey	Medium	CAD
17:00	(United States) WASDE Report	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD

Today's Scenario: - Despite renewing its intraday high, GBP/USD remains on the defensive near 1.2520 in anticipation of the crucial UK Gross Domestic Product (GDP) data released early on Friday. The cautious stance of market participants, along with pessimistic expectations and concerns of an unexpectedly positive outcome, contribute to the Pound Sterling's ability to recover from recent losses. This is particularly evident in the context of the US Dollar's lack of activity ahead of key inflation indicators in the United States.

Buy Scenario: - On the upside, for the Pound Sterling's corrective bounce to gain momentum, it must surpass the previous support line from several days ago, located around 1.2540.

Subsequently, the GBP/USD buyers may be enticed by a horizontal resistance level that has been in place for two weeks near 1.2580, as well as the recently achieved multi-month high close to 1.2680.

In addition to technical factors, the initial readings of the UK's first-quarter GDP will be crucial for GBP/USD traders, as the data is expected to show stagnant growth of 0.1% on a quarterly basis and a decrease to 0.2% year-on-year compared to the previous figure of 0.6%. Till we do not advise to buy GBP/USD.

Sell Scenario: - During the early morning in Asia, GBP/USD is fluctuating around the 1.2515 level after experiencing its largest daily decline since March 7.

This decline validates the break of a two-month ascending trend line and is supported by bearish signals from the MACD indicator. However, an upward-sloping trend line that originated in late March, currently near the round figure of 1.2500, coincides with an oversold RSI (14) line, indicating the potential for a corrective rebound in the GBP/USD price.

If GBP/USD remains weak and falls below 1.2500, the 200-bar Simple Moving Average (SMA) level around 1.2470 is expected to serve as the final line of defense for buyers of the currency pair. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -