Categories: Markets

GBP/USD Bulls Find Resistance Near 1.2200 Awaiting UK Budget

GBP/USD Bulls Find Resistance Near 1.2200 Awaiting UK Budget
  • GBP/USD bulls come up for air, but pressures remain ahead of UK budget.
  • Fed bets are easing on a hawkish line bias, weighing on the US dollar.

He GBP/USD It eased on Tuesday but was around a one-month high on the back of a weaker US dollar, hit earlier in the week by turmoil in the banking sector markets. At time of writing, GBP/USD is trading at 1.2165 and is down 0.14%, after falling from a high of 1.2203 to a low of 1.2135.

At the national level, official data showed UK wage growth slowed in the three months to January, good news for the Bank of England as it tries to rein in inflation and a further factor in the mix for your rate-setting meeting next week.

Meanwhile, for sterling, tomorrow’s budget will provide a distraction from the fallout from the SVB bankruptcy. Following the mini-budget debacle on September 23rd, Chancellor Hunt will not be looking to irritate many in his speech tomorrow. UK growth data, which was not as bad as expected, and tight UK labor market conditions mean that public sector finances have outperformed OBR predictions. Therefore, the Chancellor may have a bit of leeway,” the Rabobank analysts explain.

As long as the bulk of the measures announced by Hunt are aimed at supporting productivity and investment without increasing pressure on public finances, the pound should perform well,” the analysts added. A break above the 50-day SMA at 1.2135 is a short-term bullish sign. That said, we see room for the dollar to reverse this week’s losses and we would see GBP/USD return to 1.19 one month ahead,” Rabobank analysts explained.

Elsewhere, in the US, CPI inflation data rose 0.4% last month, after accelerating 0.5% in January. In the 12 months to February, the CPI rose 6.0%, a slower pace than January’s 6.4% annualized rise, but still above the Federal Reserve’s 2% target. Consequently, the dollar found some demand and reached a session high in the US, but has since fallen, while futures call for a Fed rate cut by the end of the year.

Fed funds futures show a change in sentiment regarding this month’s FOMC meeting. However, CME’s Fed Watch tool shows a 28.4% probability that the Fed will stay on the sideline at the end of its two-day policy meeting on March 22, down slightly from the previous day after the CPI data. .

GBP/USD

Overview
Last price today 1.2172
today’s daily change -0.0011
today’s daily variation -0.09
today’s daily opening 1.2183
Trends
daily SMA20 1.2016
daily SMA50 1.2131
daily SMA100 1.2026
daily SMA200 1.1899
levels
previous daily high 1.22
previous daily low 1.2032
Previous Weekly High 1.2114
previous weekly low 1.1803
Previous Monthly High 1.2402
Previous monthly minimum 1.1915
Fibonacci daily 38.2 1.2136
Fibonacci 61.8% daily 1.2096
Daily Pivot Point S1 1.2077
Daily Pivot Point S2 1,197
Daily Pivot Point S3 1.1909
Daily Pivot Point R1 1.2244
Daily Pivot Point R2 1.2306
Daily Pivot Point R3 1.2412

Source: Fx Street