GBPUSD receives new bids on Monday, reversing a significant portion of Friday’s decline.
The GBPUSD pair re-establishes bullish momentum on the opening day of a new week. Continuing its steady intraday rise into the mid-European session. In the last hour, spot prices have risen to a new daily high in the 1.2270-1.2275 range. Reversing a large portion of Friday’s losses amid the risk-on impulse.
The risk-on mood underpins the safe-haven Dollar and continues to support the rise.
Investors exhale a sigh of relief after learning that First Citizens Bank & Trust Company has agreed to purchase all of Silicon Valley Bank’s deposits and loans from the Federal Deposit Insurance Corporation (FDIC). This is obvious from the generally upbeat tone in the equities markets. Which does not help the safe-haven US Dollar (USD) capitalize on last week’s goodish bounce from its lowest level since February and gives support to the GBPUSD.
The Greenback is further weakened by the Federal Reserve’s signals of a likely slowdown in its rate-hiking cycle in the aftermath of the current banking sector upheaval.
Nevertheless, a significant follow-through surge in US Treasury bond rates works as a tailwind for the greenback. Potentially limiting any major gain for the GBPUSD pair. As a result, any subsequent move is likely to encounter stiff resistance near the 1.2300 round-figure mark.
GBPUSD Technical Analysis
Technical indicators on the daily chart remain in the positive region and remain far from overbought. This implies that some follow-through purchasing should pave the way for greater gains. And a return to the monthly top. around 1.2340 and 1.2345.
The upward momentum might be carried further, allowing the GBPUSD pair to retake the 1.2400 round-figure level.
The 1.2230 level, on the other hand, currently appears to defend the immediate downside ahead of the 1.2200 round figure and the 1.2175 support zone.
A convincing breach below may trigger some technical selling, dragging the GBPUSD pair towards the 1.2100 level. The latter corresponds to the 100-day Simple Moving Average (SMA), below which spot prices might fall to the next significant support in the 1.2055-1.2050 range on their way to the 1.2000 psychological level.
