GBP steady, GBPUSD forecast ahead of the heavy data week. Money markets may have overreacted to last week’s economic news from the UK since they are now pricing three further rate increases in 2023.

Contents

GBP FUNDAMENTAL FRAMEWORK The British Pound is a heavy data specific Economic Activity Schedule Technical Outlook Summary

GBP FUNDAMENTAL FRAMEWORK

Despite the fact that there won’t be any significant UK statistics during the week. The sterling is still strong versus the US dollar as of Monday morning. A short review of last week’s events showed elevated inflationary concerns. And a small rise in retail sales and PMI scores, and tightening job market indicators. The aggressive re-pricing of the BoE’s interest rate prospects followed the markets’ quite strong response.

It involves approximately three more rate increases this year! It is evident that the BoE might not cut any rates this fiscal year. Even if this is probably an exaggeration. It’s possible that the already strict monetary policy will continue to have an effect, which is why we anticipate fewer than three rate rises this year. And will take precautions before doing so.

The British Pound is a heavy data specific

As can be seen from the economic activity timetable below, the US is taking the lead this week. AA series of highly significant data points will influence the Fed’s rate decision next week. The Fed’s inflation-control plan has been quite one-sided and in support of raising rates for a longer amount of time. However, given that the Fed’s blackout phase has started, investors won’t get any new information until May 4th. Putting the focus on incoming data. The majority of data points are anticipated to show a waning US economy, opening the door for more GBP gain should this happen.

Economic Activity Schedule

Technical Outlook

Within the immediate-term stabilizing structure, the daily GBPUSD market activity has remained erratic. Since there aren’t any significant disclosures today. We expect the pair’s price to fluctuate very little within the 1.2400 and 1.2500 psychological support areas.

Major resistance levels:

1.2667
1.2500

Major support levels:

1.2400
1.2345

Summary

On Monday, the GBPUSD pair fluctuates within a constrained trading range and without any clear intraday trend.

The USD is supported by bets on further Fed rate rises and a lower risk tone, which limits the upside for the pair.

The GBP gains support and declines are restricted by expectations for another 25 bps BoE rate increase in May.

GBP steady, GBPUSD forecast a head of heavy data week

GBP FUNDAMENTAL FRAMEWORK