Daily Analysis For GBP/USD  19-05-2023

Daily Analysis For GBP/USD 19-05-2023

GBP/USD Analysis
Economic Events and Scenario for GBP/USD
Economic Events: -
00:01(United Kingdom) Gfk Consumer ConfidenceHighGBP
00:30(Japan) Core Inflation Rate YoYMediumJPY
00:30(Japan) Inflation Rate MoMLowJPY
00:30(Japan) Inflation Rate YoYHighJPY
00:30(Japan) Inflation Rate Ex-Food and Energy YoYLowJPY
01:00(Belgium) Friday after Ascension DayNoneEUR
04:00(New Zealand) Credit Card Spending YoYLowNZD
04:35(Japan) 3-Month Bill AuctionLowJPY
05:30(Japan) Tertiary Industry Index MoMLowJPY
07:00(Germany) PPI YoYLowEUR
07:00(Germany) PPI MoMMediumEUR
08:00(Slovakia) Current AccountLowEUR
09:00(Greece) Current AccountLowEUR
09:00(Italy) Construction Output YoYLowEUR
09:30(Slovenia) PPI YoYLowEUR
10:00(Slovakia) Unemployment RateLowEUR
11:00(Spain) Consumer ConfidenceMediumEUR
12:00(Montenegro) Current AccountLowEUR
13:30(Canada) Retail Sales YoYHighCAD
13:30(Canada) Retail Sales Ex Autos MoMHighCAD
13:30(Canada) Retail Sales MoMHighCAD
13:45(United States) Fed Williams SpeechMediumUSD
14:00(United States) Fed Bowman SpeechMediumUSD
15:55(Euro Area) ECB Schnabel SpeechMediumEUR
16:00(United States) Fed Chair Powell SpeechHighUSD
18:00(United States) Baker Hughes Oil Rig CountLowUSD
18:00(United States) Baker Hughes Total Rig CountLowUSD
20:00(Euro Area) ECB President Lagarde SpeechMediumEUR

Today's Scenario: - GBP/USD is recovering around 1.2410 as the market enters a period of consolidation ahead of significant upcoming events. However, the Pound Sterling experienced a decline to its lowest levels in three weeks yesterday, primarily due to the overall strength of the US Dollar. Additionally, the Cable pair was influenced by the Bank of England (BoE) Officials' inability to support the previously hawkish stance, as concerns regarding the potential negative economic effects of tighter monetary policy surfaced.

Buy Scenario: - GBP/USD has experienced a breakdown of the Head and Shoulders chart pattern on the four-hour timeframe, indicating a bearish reversal. The neckline of the pattern was drawn from the low on April 27, which was at 1.2436. Furthermore, the Pound Sterling lost its positive momentum after falling below the upward-sloping trendline originating from the low on April 03, which was at 1.2275. On the other hand, if there is a recovery above the high reached on May 09 at 1.2640, it would drive the pair towards the resistance level at the psychological round number of 1.2700, and further towards the high of April 26, 2022, at 1.2772. Till we do not advise to buy GBP/USD.

Sell Scenario: - The 20-period Exponential Moving Average (EMA) at 1.2462 is currently acting as a strong resistance for bullish movements in the Pound Sterling.
In addition, the Relative Strength Index (RSI) with a period of 14 has shifted into the bearish range of 20.00-40.00, indicating significant weakness ahead.
If the currency pair declines below the immediate support level at 1.2390, it is likely to strengthen the position of US Dollar bulls and push the Cable towards the low recorded on April 10 at 1.2344, followed by the low on April 03 at 1.2275. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -
S1 1.2369-R1 1.2471
S2 1.2330-R2 1.2533
S3 1.2268-R3 1.2572


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