Published on Apr 19, 2023

Daily Analysis For GBP/USD 19-04-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
00:00	(Japan) Reuters Tankan Index	Medium	JPY
02:00	(Australia) Westpac Leading Index MoM	Low	AUD
04:35	(Japan) 52-Week Bill Auction	Low	JPY
05:30	(Japan) Industrial Production MoM	Low	JPY
05:30	(Japan) Industrial Production YoY	Low	JPY
05:30	(Japan) Capacity Utilization MoM	Low	JPY
07:00	(European Union) New Car Registrations YoY	Medium	EUR
07:00	(United Kingdom) PPI Output YoY	Low	GBP
07:00	(United Kingdom) PPI Input MoM	Low	GBP
07:00	(United Kingdom) PPI Input YoY	Low	GBP
07:00	(United Kingdom) PPI Output MoM	Low	GBP
07:00	(United Kingdom) Core Inflation Rate YoY	Medium	GBP
07:00	(United Kingdom) Inflation Rate MoM	Medium	GBP
07:00	(United Kingdom) Inflation Rate YoY	High	GBP
07:00	(United Kingdom) PPI Core Output MoM	Low	GBP
07:00	(United Kingdom) PPI Core Output YoY	Low	GBP
07:00	(United Kingdom) Core Inflation Rate MoM	Low	GBP
07:00	(United Kingdom) Retail Price Index MoM	Low	GBP
07:00	(United Kingdom) Retail Price Index YoY	Low	GBP
08:00	(Austria) Inflation Rate MoM	Low	EUR
08:00	(Austria) Inflation Rate YoY	Low	EUR
08:00	(Austria) Harmonised Inflation Rate MoM	Low	EUR
08:00	(Austria) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Austria) CPI	High	EUR
08:00	(Slovakia) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Slovakia) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Euro Area) Current Account	Low	EUR
09:00	(Euro Area) Current Account s.a	Low	EUR
10:00	(China) FDI (YTD) YoY	Medium	CNY
10:00	(Cyprus) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Euro Area) Construction Output YoY	Low	EUR
10:00	(Euro Area) CPI	High	EUR
10:00	(Euro Area) Core Inflation Rate YoY	Low	EUR
10:00	(Euro Area) Inflation Rate MoM	Low	EUR
10:00	(Euro Area) Inflation Rate YoY	Medium	EUR
10:00	(Italy) Current Account	Low	EUR
10:00	(Malta) Inflation Rate YoY	Low	EUR
10:30	(Germany) 10-Year Bund Auction	Medium	EUR
11:10	(European Union) 3-Month Bill Auction	Low	EUR
11:10	(European Union) 6-Month Bill Auction	Low	EUR
11:30	(Portugal) Current Account	Low	EUR
11:30	(United Kingdom) 5-Year Treasury Gilt Auction	Low	GBP
11:35	(Euro Area) ECB Lane Speech	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
13:15	(Canada) Housing Starts	Medium	CAD
13:30	(Canada) PPI YoY	Low	CAD
13:30	(Canada) PPI MoM	Low	CAD
13:30	(Canada) Raw Materials Prices YoY	Low	CAD
13:30	(Canada) Raw Materials Prices MoM	Low	CAD
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
16:00	(Euro Area) ECB Schnabel Speech	Low	EUR
16:30	(United States) 17-Week Bill Auction	Low	USD
17:00	(Canada) 5-Year Bond Auction	Low	CAD
18:00	(United States) 20-Year Bond Auction	Low	USD
19:00	(United States) Fed Beige Book	Low	USD
23:45	(New Zealand) Inflation Rate YoY	Low	NZD
23:45	(New Zealand) Inflation Rate QoQ	Medium	NZD
23:45	(New Zealand) CPI	High	NZD

Today's Scenario: - The GBP/USD pair has surged above the 1.2400 level following a positive report from the Office for National Statistics (ONS) in the United Kingdom, which has highlighted a significant increase in Average Earnings for February. According to the report, the Labor Cost Index, which excludes bonuses, rose to 6.6%, surpassing market expectations of 6.2%, and matching the previous release.

However, there was a sharp increase of 28.2K in the number of individuals who applied for jobless claims, while the market had anticipated a decline of 11.8K. Additionally, the three-month Unemployment Rate has risen to 3.8%, which is higher than the market consensus and the previous release of 3.7%.

Despite the mixed results, the positive Labor Cost Index could mean that the Bank of England (BoE) will have no other choice but to increase interest rates.

Buy Scenario: - During the early morning hours in Asia, GBP/USD is trading around 1.2425-20, within a two-week-old rising wedge bearish chart formation. The pair appears cautious ahead of the release of the key UK inflation data for March, specifically the Consumer Price Index (CPI).

The pair recently rebounded from the bottom line of the rising wedge formation, which coupled with the steady RSI (14), indicates a possible further recovery for GBP/USD. However, the 21-SMA at around 1.2435 is restricting the immediate upside potential for the pair.

If GBP/USD manages to move past 1.2555, the top line of the bearish chart formation, and the 1.2500 psychological round figure, buyers could face a challenge. A break above this level would defy the bearish chart formation and potentially drive the pair toward the May 2022 high of nearly 1.2665. However, the 1.2600 round figure could act as a temporary halt during the upward climb. Till we do not advise to buy GBP/USD.

Sell Scenario: - On the other hand, if the pair breaks below 1.2365, it would confirm the rising wedge bearish pattern, leading to a theoretical decline targeting the psychological magnet of 1.2000. However, the 200-SMA level at around 1.2265 may act as additional support on the way down.

It is important to note that the highs marked in mid-March around 1.2200 could also serve as extra support to watch in case the pair falls below 1.2365. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -