Daily Analysis For GBP/USD  12-05-2023

Daily Analysis For GBP/USD 12-05-2023

GBP/USD Analysis
Economic Events and Scenario for GBP/USD
Economic Events: -
04:00(New Zealand) Business Inflation ExpectationsLowNZD
04:35(Japan) 3-Month Bill AuctionLowJPY
06:00(Finland) Current AccountLowEUR
07:00(United Kingdom) Goods Trade BalanceHighGBP
07:00(United Kingdom) GDP YoYLowGBP
07:00(United Kingdom) Goods Trade Balance Non-EUHighGBP
07:00(United Kingdom) Industrial Production MoMMediumGBP
07:00(United Kingdom) Industrial Production YoYLowGBP
07:00(United Kingdom) Manufacturing Production MoMMediumGBP
07:00(United Kingdom) Manufacturing Production YoYLowGBP
07:00(United Kingdom) Construction Output YoYLowGBP
07:00(United Kingdom) Balance of TradeLowGBP
07:00(United Kingdom) GDP Growth Rate YoYHighGBP
07:00(United Kingdom) GDP Growth Rate QoQHighGBP
07:00(United Kingdom) Business Investment QoQMediumGBP
07:00(United Kingdom) Business Investment YoYLowGBP
07:00(United Kingdom) GDP MoMHighGBP
07:00(United Kingdom) GDP 3-Month AvgMediumGBP
07:00(United Kingdom) Construction Orders YoYLowGBP
07:45(France) Inflation Rate YoYMediumEUR
07:45(France) Inflation Rate MoMMediumEUR
07:45(France) Harmonised Inflation Rate MoMLowEUR
07:45(France) Harmonised Inflation Rate YoYLowEUR
08:00(China) FDI (YTD) YoYMediumCNY
08:00(Spain) CPIHighEUR
08:00(Spain) Core Inflation Rate YoYLowEUR
08:00(Spain) Inflation Rate YoYLowEUR
08:00(Spain) Inflation Rate MoMLowEUR
08:00(Spain) Harmonised Inflation Rate YoYLowEUR
08:00(Spain) Harmonised Inflation Rate MoMLowEUR
08:00(United States) Fed Bowman SpeechMediumUSD
09:00(Euro Area) ECB Guindos SpeechHighEUR
10:00(China) Current AccountMediumCNY
11:00(Spain) Consumer ConfidenceMediumEUR
11:00(Latvia) Current AccountLowEUR
12:15(United Kingdom) BoE Pill SpeechMediumGBP
13:00(United Kingdom) NIESR Monthly GDP TrackerLowGBP
13:30(United States) Export Prices YoYLowUSD
13:30(United States) Import Prices YoYLowUSD
13:30(United States) Import Prices MoMMediumUSD
13:30(United States) Export Prices MoMMediumUSD
13:45(Germany) Current AccountLowEUR
14:00(Ecuador) Balance of TradeLowUSD
15:00(United States) Michigan Consumer SentimentHighUSD
15:00(United States) Michigan Inflation ExpectationsLowUSD
15:00(United States) Michigan Consumer ExpectationsLowUSD
15:00(United States) Michigan 5 Year Inflation ExpectationsLowUSD
15:00(United States) Michigan Current ConditionsLowUSD
15:30(Canada) Senior Loan Officer SurveyMediumCAD
17:00(United States) WASDE ReportLowUSD
18:00(United States) Baker Hughes Oil Rig CountLowUSD
18:00(United States) Baker Hughes Total Rig CountLowUSD

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: -
S1 1.2458-R1 1.2602
S2 1.2406-R2 1.2694
S3 1.2314-R3 1.2746


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