GBPUSD has seen buying interest near 1.2320 as the USD Index has fallen.
After a gradual correction to near 1.2320 in the Asian session, the GBPUSD pair has shown a recovery move. As the US Dollar Index (DXY) has retreated after a rebound to near 102.60, the Cable is aiming to retake the immediate resistance of 1.2350. Bearish bets on the US Dollar Index (DXY) have resumed, despite easing fears of a US banking crisis and rising odds of the Federal Reserve (Fed) maintaining its current interest rate policy.
As the appeal for risky assets has increased, S&P500 futures have been steadily adding gains.
The USD Index is expected to revert to its intraday low of 102.40 as market participants’ risk appetite improves further. As the appeal for risky assets has increased, S&P500 futures have been steadily adding gains. As the dollar has weakened, US equities have taken center stage. Fears of a US banking meltdown are boosting market participants’ confidence.
Meanwhile, demand for US government bonds has increased, lowering 10-year US Treasury yields to 3.55%.
The rate of growth in the United Kingdom is expected to remain flat in the fourth quarter.
The Pound Sterling has gained enough strength that Bank of England (BoE) Governor Andrew Bailey will not be afraid to raise interest rates further if there is evidence of persistent inflation. The street believes that the BoE will have to raise interest rates again because double-digit UK inflation will not go away easily.
Investors will be looking for additional clues from the UK Gross Domestic Product (GDP) data, which is due on Friday. According to the consensus, the UK’s growth remained flat in the fourth quarter of CY2022. The annual GDP is expected to remain stable. at 0.4%. Because of the synergistic effect of stagnant growth and sticky inflation, the UK economy is expected to enter a deep recession.
GBPUSD Daily Trends
| Daily SMA20 | 1.2112 |
| Daily SMA50 | 1.2151 |
| Daily SMA100 | 1.2108 |
| Daily SMA200 | 1.1894 |
