Cable Consolidates Above the 1.21 Deal with

GBP/USD PRICE, CHARTS AND ANALYSIS:

Most Read: ECB Delivers 50bps Hike Despite Banking Sector Woes, EURUSD Indecisive

GBP/USD FUNDAMENTAL BACKDROP

GBPUSD continued to edge larger in a single day as general market sentiment improved and the US Dollar weakened. Following the Swiss National Bank announcement, yesterday information filtered by means of that main US banks together with CitiBank and JPMorgan agreed a $30 billion Dollar support bundle for distressed lender First Republic Bank. The information additional boosted sentiment and noticed GBPUSD rally from lows round 1.20300 to commerce on the 1.2160 deal with (on the time of writing).

Currency Strength Chart: Strongest – NZD, Weakest – USD.

Source: FinancialJuice

Given that the financial docket for subsequent week consists of each the Federal Reserve and the Bank of England fee selections any additional upside transfer could also be capped by the weekly excessive round 1.22016. This might imply a continuation of rangebound commerce between the 1.2000 and 1.2200 mark for the rest of the day and the early a part of subsequent week.

According to stories the UK Government has confirmed that it’s making a brand new provide to National Health Services (NHS) workers relating to wage will increase which can embody a one-off bonus fee which unions declare quantities to GBP2.5 billion. The Unions have stated they might advocate members settle for the brand new provide whereas confirming additional strikes have been suspended. Furthermore, it appears the long-awaited finish to the brand new Brexit deal might lastly be coming to an finish as UK MPs are anticipated to vote on the ‘Windsor framework’ subsequent week Wednesday.

Following the 50bps hike by the European Central Bank (ECB) yesterday we now have seen a knock-on impact, with the chance of a fee hike from each the Federal Reserve and the Bank of England (BoE) now showing extra possible. The chance for a Fed Rate hike of 25bps subsequent week has jumped from 54% yesterday to 82% as of this morning. Next week’s UK inflation knowledge comes a day earlier than the BoE fee resolution and will function a last information for the Central Bank with a rise in inflation more likely to lead to a fee hike.

Later right this moment we do have the BoE Ipsos Survey at 09:30 UK time which might give additional insights into client sentiment in addition to client expectations and emotions round inflation. This shall be adopted up within the US session by the Preliminary Michigan Consumer Sentiment Release, each occasions might add some extent of volatility however are unlikely to alter the general image for GBPUSD.

For all market-moving financial releases and occasions, see the DailyFX Calendar

TECHNICAL OUTLOOK

On the day by day timeframe value motion is hinting at additional upside with a brand new larger excessive wanting extra possible. Since bottoming out across the 1.1800 deal with on March 8 we now have had a big upside rally with a day by day candle shut above the earlier vary excessive of 1.2173. We have had a little bit of retracement earlier than discovering assist yesterday on the 100-day MA whereas printing a bullish inside bar day by day candle shut hinting at additional upside. The key take a look at for the pair shall be whether or not the weekly excessive of 1.2200 will maintain agency right this moment or whether or not we might doubtlessly break larger and convey the 1.2260 resistance degree into play.

Alternatively, a rejection from present value might see a push again towards the 100-day MA at 1.20400 conserving the pair inside its weekly vary between the 1.2000 and 1.2200 handles respectively.

GBP/USD Daily Chart – March 17, 2023

Source: TradingView

Written by: Zain Vawda, Markets Writer for DailyFX.com

Contact and comply with Zain on Twitter: @zvawda