GBP weekly prediction. Bullseye fresh trigger with UK job data. Positive data was offset by losses vs the dollar and rises against the euro, giving the GBP an uneven week.

GBP Key Considerations

Encouraging data was met by falls versus the dollar with gains vs the euro, giving the GBP an uncertain week.

Price movement this week will be influenced by UK job data and general sentiment.

Under the 1.2660-70 Level, GBPUSD Remains Vulnerable to Further Drop.

GBP and BOE Meets Its Effect on UK GDP

After the BoE meeting on Thursday, the GBP selloff persisted and accelerated on Friday. As the GBPUSD fell under the psychological barrier of 1.2500, trading around 1.2460. As seen by sterling’s gains versus the Euro, the decline in GBPUSD was mainly due to the dollar rather than the pound.

The central bank’s upgraded growth estimates were among the notable takeaways from the (BoE) conference. The bank kept its current position with a hazy future direction, drawing the line that more increases may be forthcoming. If inflation demonstrates more persistent symptoms.

Taking a closer look at the BoE prediction. The Central Bank anticipates that inflation will drop to levels that are well below its objective during the next 2 years. Intriguingly, the estimates don’t call for any more interest rate increases. Because the existing rate of 4.5% is thought to be sufficiently constrictive.

Costs of energy are considered to be a significant component of this. However, the BoE is treading unfamiliar waters, much like many Central Banks. More so than the GBP weakening, the rising dollar’s gain was to blame for the selloff in the pound that followed the rate rise.

ONS reports some reason for GDP contraction for Q2

Source: ONS

The UK’s Q1 GDP increased by 0.1%, which on its face portrays a good image, according to figures released on Friday morning. However, a closer look reveals that the March decrease and February halt aren’t encouraging signs for Q2. According to remarks from the ONS, the March shrinkage was an anomaly brought on by the adverse climate since retail sales were also impacted.

THINKING ABOUT NEXT WEEK

The focus will be on UK labor and wage statistics, with consideration given to the coming week. And the possible risk to the GBP going forward. Last week, the (BoE) made it plain that a pair of data reports on wages and inflation. That will define the course that the Central Bank would take in June.

Recent BoE Business survey results have shown a possible softening on this front. However, let’s wait and see what Tuesday’s number reveals. While a negative surprise might reinforce the case for market players anticipating a BoE respite in June, an upward shock in wage growth could raise rate hike prospects with GBP gaining a bid.

The general attitude of the markets is still fragile. And the mounting anxiety around the US debt ceiling is just making matters worse. Although the Pound might not be directly impacted, the pair may see difficulties from a USD standpoint. Interestingly, the concern with the US debt default has helped the USD recently as investors search for safe havens, and the JPY also benefiting. With any changes about the US default or enhanced recessionary worries to be felt throughout markets. This creates a negative risk for the GBPUSD.

British economic calendar for the upcoming week

After two weeks with a lot of event risk, the UK economic docket is expected to have a quiet week. There are just two “buzzing” rated releases of data this week.  Byet there are also four ” moderate ” rated releases.

Economic Activity Schedule

Here are the top two activities for the upcoming week on the economic agenda for the Eurozone:

Employment Change data for Feb is due at 6:00 GMT on Tuesday, May 12.. And Jobless data

Technical Perspective

Based on the selloff on Thursday, Sterling Bulls seem to have lost pace. With the RSI moving into an overbought area on Friday. There was a resurgence of a certain buying pressure. However, the rise in the Dollar Index and the desire for haven assets had a significant role in the movement.

Given the supportive BoE statement and the possibility of another rate rise. The GBPUSD was unable to surpass the important resistance region near the 1.2660 mark. There’s a strong chance that the pair will fluctuate in a range trade. Across the upcoming week between the 1.2450 support region and the most recent high at the 1.2670 handle. Without a daily candle closing the swing low at 1.2460, the GBPUSD stays positive.

Key Technical Levels

Resistance levels:

• 1.2660
• 1.2750
• 1.3000

 Support levels:

• 1.2450
• 1.2360 (50-day MA)
• 1.2250 (100-day MA)