Published on Mar 28, 2023

Daily Analysis For GBP/USD 28-03-2023

GBP/USD Analysis

Economic Events and Scenario for GBP/USD

Economic Events: -

GMT	Event	Impact	Currency
1:30	(Australia) Retail Sales MoM	High	AUD
4:35	(Japan) 40-Year JGB Auction	Low	JPY
5:15	(Australia) RBA Connolly Speech	Medium	AUD
7:00	(Lithuania) Retail Sales MoM	Low	EUR
7:00	(Lithuania) Retail Sales YoY	Low	EUR
7:45	(France) Business Climate Indicator	Low	EUR
7:45	(France) Business Confidence	Medium	EUR
9:00	(Italy) Consumer Confidence	Medium	EUR
9:00	(Italy) Business Confidence	Medium	EUR
9:35	(Euro Area) ECB Enria Speech	Medium	EUR
9:45	(United Kingdom) BoE Gov Bailey Speech	Medium	GBP
10:10	(Italy) Index-Linked BTP Auction	Low	EUR
10:10	(Italy) BTP Short Term	Low	EUR
10:10	(Italy) 10-Year BTP Short Term Auction	Low	EUR
10:30	(Germany) 2-Year Schatz Auction	Low	EUR
11:00	(Ireland) Retail Sales YoY	Low	EUR
11:00	(Ireland) Retail Sales MoM	Low	EUR
11:00	(Luxembourg) Balance of Trade	Low	EUR
13:30	(United States) Retail Inventories Ex Autos MoM	Medium	USD
13:30	(United States) Goods Trade Balance	High	USD
13:30	(United States) Wholesale Inventories MoM	Medium	USD
13:55	(United States) Redbook YoY	Low	USD
14:00	(United States) House Price Index YoY	Low	USD
14:00	(United States) House Price Index	Low	USD
14:00	(United States) S&P/Case-Shiller Home Price YoY	Medium	USD
14:00	(United States) S&P/Case-Shiller Home Price MoM	Medium	USD
14:00	(United States) House Price Index MoM	Low	USD
15:00	(United States) CB Consumer Confidence	Medium	USD
15:00	(United States) Richmond Fed Manufacturing Shipments Index	Low	USD
15:00	(United States) Richmond Fed Manufacturing Index	Low	USD
15:00	(United States) Richmond Fed Services Index	Low	USD
15:00	(United States) Fed Barr Testimony	Medium	USD

Today's Scenario: - The GBP/USD pair has broken above the crucial resistance level of 1.2300, benefiting from a positive market sentiment. The USD Index is expected to face more downward pressure as investors hope that the Federal Reserve will maintain interest rates at their current level.

The Cable has resumed its upward trend after experiencing a bullish hidden divergence, which has further strengthened the pair's positive momentum.

In summary, the GBP/USD pair has successfully surpassed the critical resistance level of 1.2300 due to the optimistic market mood. The USD Index is likely to face more selling pressure as investors anticipate that the Federal Reserve will keep interest rates steady. The Cable's bullish hidden divergence has further supported the pair's upward momentum.

Buy Scenario: - During Tuesday's Asian session, the GBP/USD pair continued its bullish run, as buyers aimed to surpass the 1.2300 level, following a positive start to the week. The pair's upward momentum has been supported by the previous rally from the 50-bar Simple Moving Average and the 61.8% Fibonacci retracement level of the pair's decline between January and March. Additionally, the MACD indicator is signaling a potential bullish cross, which could further strengthen the pair's bullish bias.

However, the confirmation of the rising wedge bearish chart pattern from the previous week has left sellers hopeful. Unless the pair manages to stay below the previous support line of the wedge, located near 1.2330 at the time of writing, sellers may continue to dominate. In such a scenario, the pair could face resistance near the wedge's top line, located near the 1.2400 round figure, followed by multiple hurdles near the 1.2420-25 area, before potentially reaching the Year-To-Date (YTD) top near 1.2450.

Sell Scenario: - On the downside, the 50-bar Simple Moving Average and the previously mentioned significant Fibonacci ratio may provide short-term support for bearish traders around 1.2220 and 1.2200, respectively.

If the GBP/USD pair continues to decline below 1.2200, the 50% Fibonacci retracement level and the 200-bar Simple Moving Average may act as additional support levels around 1.2125 and 1.2080, respectively, before potentially directing sellers towards the psychological level of 1.2000.

It is worth noting that several support levels are present near 1.1920, which may serve as the last line of defense for buyers of the GBP/USD pair. Till then we do not advise selling GBP/USD.

Support and Resistance Level: -