GBP is tracking the US dollar as risk appears to be easing. In the coming days, the risk mood will govern the pound. According to UK Chancellor Jeremy Hunt, there won’t be a slump.

GBP is following the US dollar and financial markets

Following yesterday’s flight to quality, the financial markets are having a break in today’s early turnover. Risk assets were dumped widely and occasionally pretty recklessly. As a result of the spillover of banking concerns from the US to Europe. Haven assets like the US dollar, US Treasury bonds, gold, and the Yen all saw strong demand.

The news is that the struggling banking company Credit Suisse has been given a 50 billion Swiss Franc lifeline by the Swiss National Bank. In view to strengthen its balance sheet has helped the risk tone in the market today.

Wednesday, the CDS market had Credit Swiss default as having a nearly 50% probability of happening  As a result of the US dollar moving lower due to today’s relatively calmer market A number of USD currencies, including sterling, have been able to advance.

GBP awaits policy statements by ECB

Today’s session will end with the announcement of the ECB‘s most recent monetary policy move by President Lagarde. The 50 bp increase Ms. Lagarde promised at the previous gathering. Must now be questioned in light of mounting financial pressure.

The quickly changing events and market moves on Wednesday overshadowed the UK’s Spring Budget. The UK would escape a recession in 2023,  And, inflation would drop from 10.7% in the final quarter of 2022 to 2.9% by year-end.

Despite remaining above the central bank’s 2 percent goal, this sharp decline will allow the BOE to scale back any additional rate increases as needed.

Hunt and OBR predict that the UK will avoid a recession in their UK Spring Statement.

The FOMC rate decision on March 22 and the Bank of England’s upcoming policy meeting on March 23, is a significant weeks for GBP traders.

The only thing that can be assured for next week is increased volatility due to the conflicting and continually shifting market perceptions of what each central bank will do.

GBP Technical Perspective

Following yesterday’s sell-off, the pound is advancing today and is trading on either side of 1.2100. The CCI indicator indicates that the duo is in overbought territory. The short-term negative channel is still in effect.

However, the 20- and 200-day moving averages have been supporting the upward move. If the 50-dma, which is currently at 1.2137. If verified to have been broken, the duo may attempt to test Tuesday’s high of 1.2204.

THE MIXED IMAGE THAT RETAIL TRADE DATA PAINTS

According to statistics from retail traders, 56.52 percent of traders are net long. With a long-to-short ratio of 1.30 to 1.

In contrast, the number of traders who are net short is 23.36% lower than late last night, and 12.54% higher than last week. The quantity of investors who are net-long is 11.56%. Higher than Wednesday and 34.88% lower compared to the prior week.

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