GBPUSD tried to rebound towards 1.2100 but lost impetus.
After recovering to the 1.2100 range in the early European morning on Thursday, GBPUSD has lost traction and reversed its day gains. Investors stay on the sidelines while the European Central Bank (ECB) announces its policy choices, preventing the pair from gaining positive momentum. Although the Swiss National Bank confirmed that Credit Suisse had satisfied the capital criteria to be eligible for extra liquidity. If necessary, investors remained apprehensive early Thursday. The FTSE 100 Index in the United Kingdom retraced a piece of its positive starting gap and was last seen climbing 0.4% on the day.
If the ECB adopts a dovish stance, the pound sterling may gain ground versus its rivals.
The ECB is anticipated to hike key interest rates by 50 basis points later in the day. In the event that The Euro is anticipated to encounter selling pressure. As the ECB responds to the shifting economic situation and adopts a dovish perspective by refraining from committing to future large rate rises. Because of the uncertainties surrounding the US Federal Reserve’s next policy move. The Pound Sterling might capture some of the capital outflows from the Euro in that scenario. As a result, a strong decrease in the EURGBP pair might aid the GBPUSD pair go higher.
Yet, further Euro strength as a result of a hawkish ECB surprise should force. The US Dollar to decline against its key rivals. In such situation, GBPUSD might gain positive momentum as well. Although a sudden increase in EURGBP could restrict the pair’s gains.
The US economic calendar will include weekly Jobless Claims. As well as February Housing Starts and Permits for construction. These data releases are unlikely to cause a significant market reaction ahead of the ECB meeting.
GBPUSD Technical Outlook
GBPUSD was last seen trading around 1.2060. Where the four-hour chart’s 200-period Simple Moving Average is placed. Around 1.2040, the 100-day SMA and the Fibonacci 38.2% retracement of the most recent rise provide significant support.
If that support fails, the GBPUSD is expected to continue its decline towards 1.2000. (psychological level, 50% Fibonacci retracement) and 1.1950 (61.8% Fibonacci retracement).
On the upside, 1.2100 (psychological level, Fibonacci 23.6% ) serves. As the initial resistance level, GBPUSD followed by 1.2140 (previous support, static level). And 1.2200 (future resistance) (end-point of the latest uptrend, static level, psychological level).
