Published on May 16, 2023

Daily Analysis For GBP/USD 16-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
01:30	(Australia) Westpac Consumer Confidence Index	High	AUD
01:30	(Australia) Westpac Consumer Confidence Change	High	AUD
02:30	(Australia) RBA Meeting Minutes	High	AUD
03:00	(China) Unemployment Rate	High	CNY
03:00	(China) Retail Sales YoY	High	CNY
03:00	(China) Industrial Production YoY	High	CNY
03:00	(China) Fixed Asset Investment (YTD) YoY	Medium	CNY
06:00	(Finland) GDP YoY	Low	EUR
06:00	(Finland) GDP Growth Rate QoQ	Low	EUR
06:00	(Finland) GDP Growth Rate YoY	Low	EUR
07:00	(United Kingdom) HMRC Payrolls Change	Low	GBP
07:00	(United Kingdom) Average Earnings excl. Bonus (3Mo/Yr)	Low	GBP
07:00	(United Kingdom) Average Earnings incl. Bonus (3Mo/Yr)	Medium	GBP
07:00	(United Kingdom) Unemployment Rate	High	GBP
07:00	(United Kingdom) Claimant Count Change	High	GBP
07:00	(United Kingdom) Employment Change	High	GBP
07:00	(United Kingdom) Labour Productivity QoQ	Low	GBP
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Slovakia) GDP Growth Rate YoY	Low	EUR
08:00	(Slovakia) GDP Growth Rate QoQ	Low	EUR
08:30	(Netherlands) Household Consumption YoY	Low	EUR
08:30	(Netherlands) GDP Growth Rate QoQ	Medium	EUR
08:30	(Netherlands) GDP Growth Rate YoY	Medium	EUR
08:30	(Netherlands) Balance of Trade	Low	EUR
09:00	(European Union) ECOFIN Meeting	Medium	EUR
09:00	(France) IEA Oil Market Report	Medium	EUR
09:00	(Italy) Inflation Rate MoM	Low	EUR
09:00	(Italy) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Italy) Inflation Rate YoY	Medium	EUR
09:00	(Italy) Harmonised Inflation Rate YoY	Low	EUR
09:00	(Italy) CPI	High	EUR
09:40	(Spain) 3-Month Letras Auction	Low	EUR
10:00	(Cyprus) GDP Growth Rate YoY	Low	EUR
10:00	(Cyprus) GDP Growth Rate QoQ	Low	EUR
10:00	(Euro Area) GDP Growth Rate YoY	Medium	EUR
10:00	(Euro Area) GDP Growth Rate QoQ	Medium	EUR
10:00	(Euro Area) Employment Change QoQ	High	EUR
10:00	(Euro Area) Employment Change YoY	High	EUR
10:00	(Euro Area) Balance of Trade	Medium	EUR
10:00	(Euro Area) ZEW Economic Sentiment Index	Medium	EUR
10:00	(Germany) ZEW Current Conditions	Low	EUR
10:00	(Germany) ZEW Economic Sentiment Index	High	EUR
10:00	(Montenegro) Inflation Rate MoM	Low	EUR
10:00	(Montenegro) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Montenegro) Inflation Rate YoY	Low	EUR
13:15	(United States) Fed Mester Speech	Medium	USD
13:30	(Canada) Manufacturing Sales MoM	Low	CAD
13:30	(Canada) Core Inflation Rate MoM	Low	CAD
13:30	(Canada) Core Inflation Rate YoY	Medium	CAD
13:30	(Canada) Inflation Rate MoM	Medium	CAD
13:30	(Canada) Inflation Rate YoY	High	CAD
13:30	(Canada) CPI Trimmed-Mean YoY	High	CAD
13:30	(Canada) CPI Median YoY	High	CAD
13:30	(United States) Retail Sales Ex Gas/Autos MoM	High	USD
13:30	(United States) Retail Sales YoY	High	USD
13:30	(United States) Retail Sales Ex Autos MoM	High	USD
13:30	(United States) Retail Sales MoM	High	USD
13:55	(United States) Redbook YoY	Low	USD
13:55	(United States) Fed Bostic Speech	Medium	USD
14:15	(United States) Manufacturing Production MoM	Low	USD
14:15	(United States) Industrial Production MoM	Medium	USD
14:15	(United States) Industrial Production YoY	Medium	USD
14:15	(United States) Manufacturing Production YoY	Low	USD
14:15	(United States) Capacity Utilization	Low	USD
14:45	(Euro Area) ECB Tuominen Speech	Low	EUR
15:00	(United States) Retail Inventories Ex Autos MoM	Low	USD
15:00	(United States) Business Inventories MoM	Medium	USD
15:00	(United States) NAHB Housing Market Index	Medium	USD
15:00	(United States) Fed Barr Testimony	Medium	USD
15:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR
16:00	(New Zealand) Global Dairy Trade Price Index	Low	NZD
16:30	(United States) 52-Week Bill Auction	Low	USD
17:15	(United States) Fed Williams Speech	Medium	USD
20:15	(United States) Fed Logan Speech	Medium	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - The GBP/USD pair is exhibiting erratic movements, fluctuating above the nearby support level of 1.2550 during the early European session. This volatility contraction in the Cable comes ahead of the upcoming release of the United Kingdom's employment data.

During the Asian session, S&P 500 futures have recorded significant losses as investors exercise caution in anticipation of the US debt ceiling talks. The prevailing market sentiment appears to lean towards risk aversion, as the outcome of these negotiations between congressional Republicans and US President Joe Biden is expected to bring about unexpected developments and surprises.

Buy Scenario: - To maintain a positive outlook, the Pound (GBP) needs to stay above the pivotal level of 1.2503 and aim for the First Major Resistance Level (R1) at 1.2561. Breaking above Monday's high of 1.2532 would indicate a prolonged breakout phase. However, for sustained upward momentum, the Pound would require supportive economic data from China and the US, as well as news related to the debt ceiling.

In the event of a sustained rally, the GBP/USD pair is likely to test the Second Major Resistance Level (R2) at 1.2593, followed by resistance at 1.26. The Third Major Resistance Level is situated at 1.2651. Till we do not advise to buy GBP/USD.

Sell Scenario: - On the downside, if the Pound falls below the pivot level, it would bring the First Major Support Level (S1) at 1.2470 into play. However, unless there is another significant sell-off triggered by risk aversion, the GBP/USD should be able to avoid dropping below the sub-1.2450 mark and the Second Major Support Level (S2) at 1.2412. The Third Major Support Level (S3) is located at 1.2380. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -