Published on May 23, 2023

Daily Analysis For GBP/USD 23-05-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
00:00	(Australia) Judo Bank Composite PMI	Low	AUD
00:00	(Australia) Judo Bank Manufacturing PMI	High	AUD
00:00	(Australia) Judo Bank Services PMI	High	AUD
01:00	(Montenegro) Independence Day	None	EUR
01:30	(Japan) Jibun Bank Manufacturing PMI	Medium	JPY
01:30	(Japan) Jibun Bank Services PMI	Medium	JPY
01:30	(Japan) Jibun Bank Composite PMI	Low	JPY
07:00	(Lithuania) Industrial Production MoM	Low	EUR
07:00	(Lithuania) Industrial Production YoY	Low	EUR
07:00	(United Kingdom) Public Sector Net Borrowing	Low	GBP
07:00	(United Kingdom) Public Sector Net Borrowing Ex Banks	Low	GBP
08:00	(Slovakia) Current Account	Low	EUR
08:15	(France) S&P Global Composite PMI	Low	EUR
08:15	(France) S&P Global Manufacturing PMI	Medium	EUR
08:15	(France) S&P Global Services PMI	Medium	EUR
08:15	(Euro Area) ECB Guindos Speech	High	EUR
08:15	(Euro Area) ECB Jochnick Speech	Low	EUR
08:30	(Germany) S&P Global Composite PMI	Low	EUR
08:30	(Germany) S&P Global Services PMI	High	EUR
08:30	(Germany) S&P Global Manufacturing PMI	High	EUR
09:00	(Euro Area) Current Account	Low	EUR
09:00	(Euro Area) S&P Global Composite PMI	Low	EUR
09:00	(Euro Area) S&P Global Services PMI	High	EUR
09:00	(Euro Area) S&P Global Manufacturing PMI	High	EUR
09:00	(Euro Area) Current Account s.a	Low	EUR
09:30	(Slovenia) Consumer Confidence	Low	EUR
09:30	(United Kingdom) S&P Global/CIPS Manufacturing PMI	High	GBP
09:30	(United Kingdom) S&P Global/CIPS UK Services PMI	High	GBP
09:30	(United Kingdom) S&P Global/CIPS Composite PMI	Low	GBP
10:00	(Italy) Current Account	Low	EUR
10:00	(United Kingdom) 28-Year Index-Linked Treasury Gilt Auction	Low	GBP
10:30	(Germany) 2-Year Schatz Auction	Low	EUR
11:00	(Latvia) PPI YoY	Low	EUR
11:00	(Latvia) PPI MoM	Low	EUR
11:25	(Euro Area) ECB Enria Speech	Low	EUR
13:00	(United States) Building Permits	Medium	USD
13:00	(United States) Building Permits MoM	Low	USD
13:30	(Canada) Raw Materials Prices YoY	Low	CAD
13:30	(Canada) Raw Materials Prices MoM	Low	CAD
13:30	(Canada) PPI YoY	Low	CAD
13:30	(Canada) PPI MoM	Low	CAD
13:55	(United States) Redbook YoY	Low	USD
14:00	(United States) Fed Logan Speech	Medium	USD
14:45	(United States) S&P Global Services PMI	High	USD
14:45	(United States) S&P Global Composite PMI	Medium	USD
14:45	(United States) S&P Global Manufacturing PMI	High	USD
15:00	(United States) Richmond Fed Manufacturing Shipments Index	Low	USD
15:00	(United States) New Home Sales MoM	High	USD
15:00	(United States) Richmond Fed Services Index	Low	USD
15:00	(United States) New Home Sales	High	USD
15:00	(United States) Richmond Fed Manufacturing Index	Low	USD
15:30	(Slovenia) Unemployment Rate	Low	EUR
18:00	(United States) 2-Year Note Auction	Low	USD
20:00	(El Salvador) Balance of Trade	Low	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD
23:45	(New Zealand) Retail Sales YoY	High	NZD
23:45	(New Zealand) Retail Sales QoQ	High	NZD

Today's Scenario: - GBP/USD is experiencing a resurgence in upward momentum, benefiting from the pullback of the US Dollar after a sluggish start to the week. The currency pair is now reaching its intraday high near 1.2450 during early Tuesday's trading session. This upward movement is attributed to optimistic expectations surrounding the Bank of England (BoE) due to concerns over inflation.

However, in recent negotiations, US President Joe Biden and House Speaker Kevin McCarthy were unable to reach a deal to prevent the debt ceiling from expiring. Nevertheless, policymakers maintain hope and optimism about reaching an agreement to avoid a default by the United States. In a statement released by the White House and reported by Reuters late Monday, President Biden stated, "I just concluded a productive meeting with Speaker McCarthy about the need to prevent default." On the other hand, House Speaker McCarthy acknowledged that the meeting with Biden was productive, but no agreement on the debt ceiling was reached.

Buy Scenario: - On the buying side of GBP/USD, it must surpass the former support-now-resistance line around 1.2500 to attract buyers of the British Pound.

If the Cable price manages to stay above 1.2500, supported by positive UK data, there is a possibility of witnessing an increase towards the yearly high of 1.2680. Till we do not advise to buy GBP/USD.

Sell Scenario: - GBP/USD is reflecting a sense of apprehension among traders as it hovers around 1.2430 during the early hours of Tuesday morning in London. This cautious sentiment is evident ahead of the release of the initial readings of the S&P Global/CIPS PMI for May in the UK, as well as the US S&P Global PMIs for the same month.

Notably, the currency pair recently broke below an ascending trend line that had been in place for almost two months, which was observed last week. This, coupled with bearish signals from the MACD indicator, has given GBP/USD sellers a reason to remain hopeful.

However, the RSI (14) line remains stable near the 50.0 level, and there is support from the 50-day moving average (DMA) around 1.2420. Additionally, the psychological level of 1.2400 provides further resistance against the GBP/USD bears.

In the event of a further decline, a swift drop towards the February high around 1.2270 cannot be ruled out. Nevertheless, there is a challenging support trend line, stemming from October 2022, located near 1.2255 at present, which may prove difficult for the bears to breach. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -