Published on Apr 17, 2023

Daily Analysis For GBP/USD 17-04-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
01:00	(Cyprus) Orthodox Easter Monday	None	EUR
01:00	(Greece) Orthodox Easter Monday	None	EUR
01:00	(Montenegro) Orthodox Easter Monday	None	EUR
01:01	(Ireland) Construction PMI	Low	EUR
02:30	(China) PBoC 1-Year MLF Announcement	Low	CNY
08:30	(Euro Area) ECB McCaul Speech	Low	EUR
09:00	(Italy) Harmonised Inflation Rate YoY	Low	EUR
09:00	(Italy) Inflation Rate YoY	Medium	EUR
09:00	(Italy) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Italy) Inflation Rate MoM	Low	EUR
09:00	(Italy) CPI	High	EUR
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(China) FDI (YTD) YoY	Medium	CNY
10:00	(Euro Area) ECB Tuominen Speech	Low	EUR
10:30	(Germany) 12-Month Bubill Auction	Low	EUR
10:45	(European Union) EU Bond Auction	Low	EUR
10:45	(European Union) 10-Year Bond Auction	Low	EUR
11:00	(Slovakia) Unemployment Rate	Low	EUR
13:30	(Canada) Wholesale Sales MoM	Low	CAD
13:30	(Canada) Foreign Securities Purchases by Canadians	Low	CAD
13:30	(Canada) Foreign Securities Purchases	Low	CAD
13:30	(United States) NY Empire State Manufacturing Index	Medium	USD
14:00	(Belgium) Balance of Trade	Low	EUR
14:00	(France) 3-Month BTF Auction	Low	EUR
14:00	(France) 12-Month BTF Auction	Low	EUR
14:00	(France) 6-Month BTF Auction	Low	EUR
14:00	(United Kingdom) BoE Cunliffe Speech	Low	GBP
15:00	(United States) NAHB Housing Market Index	Medium	USD
16:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
21:00	(United States) Foreign Bond Investment	Low	USD
21:00	(United States) Net Long-term TIC Flows	Medium	USD
21:00	(United States) Overall Net Capital Flows	Low	USD

Today's Scenario: - GBP/USD is facing downward pressure as it extends its previous day's pullback from a 10-month high, with the pair hitting an intraday low near 1.2390 early on Monday. The Cable pair's decline is justified by recent concerns arising from the UK, as well as the optimism surrounding the Federal Reserve (Fed), which has led to the snapping of a four-week uptrend and a bearish sentiment prevailing.

According to the Financial Times (FT), "The Bank of England is considering a major overhaul of its deposit guarantee scheme, including boosting the amount covered for businesses and forcing banks to pre-fund the system to a greater extent to ensure faster access to cash when a lender collapses." This news has reignited banking fears surrounding the UK and has put additional pressure on the Cable pair.

Buy Scenario: - If there is a recovery above the high of April 13 at 1.2537, the asset could rally towards a new 10-month high at 1.2597, which was last seen on June 8, 2022. Breaking this level could expose the asset to the high of May 27 at 1.2667. Till we do not advise to buy GBP/USD.

Sell Scenario: - GBP/USD has experienced a sharp decline after forming a Double Top chart pattern on a two-hour time frame. The Cable pair failed to exceed its previous high after encountering a resistance level from responsive sellers at elevated levels. The Pound Sterling bulls are at a critical point near the edge of the upward-sloping trendline plotted from the low of March 24 at 1.2191.

The 20 and 50-period Exponential Moving Averages (EMAs) are on the verge of delivering a bearish crossover at around 1.2410.

At the same time, the Relative Strength Index (RSI) (14) has entered the bearish range of 20.00-40.00, suggesting further weakness in the coming days.

If the pair slips below the low of April 14 at around 1.2400, it could expose the asset to the low of April 10 at 1.2345, followed by the low of March 30 at 1.2294. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -