GBP Strong UK data on Friday may support the pound. The GBPUSD corrective decline seems to have reached its conclusion. According to OCBC Bank analysts. The sterling may hold up well if the UK GDP shows that the British economy can avoid recession.
GBP looks for Tomorrow’s data dump
The release of UK data on Friday has garnered attention. Particularly after the UK’s National Institute of Economic and Social Research (NIESR) forecast that the country is most likely to avoid a recession this year.
The think tank’s projection might be confirmed by a stronger set of UK data prints, and more unwind of GBP short positions might keep the currency strengthened.
GBP BoE is concerned that UK inflation could continue to trend upward.
This year, UK consumers will continue to suffer from sluggish growth and persistent inflation, according to the most recent blog post from the National Institute of Economic and Social Research (NIESR).
The NIESR predicts that the official UK Fourth – quarter GDP, which will be reported tomorrow at 07:00 GMT, shall indicate little to no growth in the economy, and that UK growth will most likely stay at or near zero through 2023. And this year, the sad fact keeps coming.
Given the lags in monetary policy transmission, the present tightening cycle will probably have a negative impact on output and growth in 2024. The interest rate rises have been swift and significant. But given the yearly inflation rates we’ve experienced throughout 2022, this is now necessary.
Economic Activity Schedule
UK Policy Makers Comments in View
At the Treasury Select Committee (TSC) today, MPC members Huw .Pill, Professor Silvana Tenreyro, and Professor Jonathan Haskel joined Bank of England Governor Andrew Bailey.
Policymakers have thus far been challenged as to whether the central bank is lagged in combating inflation. The MPC is remains concerned about persistently rising inflation. According to remarks made so far by the BoE officials, and it’s possible that the UK economy may experience a prolonged time of decline.
US dollar Strengthens British Pound
Due to a slightly higher Pound and a lower US dollar, cable is back above 1.2100. On Tuesday, the GBPUSD dipped under 1.2000 and turning upward off the 200-day moving average. Before 1.2292 is once again in reach, the next resistance level is seen around 1.2200 (50-dma in question}.
TRADERS ARE RAISING THEIR LONG POSITIONS IN RETAIL
According to data from retail traders, 57.77% of traders are net-long, with a long-to-short ratio of 1.37 to 1.
While the number of traders who are net-long has decreased 3.65% from yesterday having increased 45.78percent from the previous week, this same number of investors who are net-short has increased 7.67percent from Wednesday and decreased 23.56percent from the previous week.
Prices for GBPUSD could drop further. Fewer net-long than Wednesday, but rather more net-long than the previous week, is the posture. We have a further divided GBPUSD trading tendency as a result of the present mood and previous adjustments.
Technical Perspectives
1.2040/50 (50% fibo) serves as support here, followed by 1.1950 (200 DMA) and 1.1820. (100 DMA). 1.2190 (50 DMA), 1.2230 (21 DMA), as well as 1.2450 degrees of resistance-double top formation.
