- The British pound barely advanced 0.01% on the day.
- Gloomy economic data out of the UK weighed on the GBP/USD pair.
- GBP/USD Price Forecast: Path of least resistance is skewed to the downside as GBP bulls failed to recapture 1.3200.
The British pound recovered from intraday losses in the mid-American session, although it failed to reach 1.3200, courtesy of a state of risk appetite in the market, the Fed’s aggressive stance and the Bank of England’s rate hike, with a dissident, perceived as a moderate increase. At the time of writing, the GBP/USD pair is trading at 1.3187.
At the end of the North American session, market sentiment improved, boosting appetite for risk-sensitive currencies such as the British pound. However, amid increased appetite for the dollar, disappointing data out of the UK put a cap on GBP/USD’s recovery.
The UK economic docket reported UK retail sales, which declined 0.3% in February, below the 0.6% increase expected and below January’s 1.9% reading. In addition, sales without gasoline fell 0.7% in February and disappointed forecasts with an estimate of an increase of around 0.5%.
Meanwhile, across the pond, two commercial banks expect the US central bank to hike 50bps. On Friday, Goldman Sachs and Citigroup expressed that they estimate that the Federal Reserve would raise 50 bps in the May and June meetings, which would raise the Federal Funds Rate (FFR) to 1.50% at the end of the first half of the year.
The bank’s forecasts are based on what Fed policymakers said during the week, led by Fed Chairman Jerome Powell, the openness to raising rates by more than 25 basis points, as he spoke at the conference. NABE on Monday.
US economic calendar featured February Pending Home Sales contracted 4.1% from an expected increase of 1% MoM. Additionally, the University of Michigan Consumer Sentiment Index for March came in at 59.4 from 59.7, while inflation expectations remained at 5.4% vs. 4.9% in the previous report.
GBP/USD Price Forecast: Technical Outlook
The GBP/USD pair’s failure to recapture the 1.3200 level for the second day in a row left the pair vulnerable to further selling pressure. Furthermore, the Relative Strength Index (RSI) oscillator is at 44 in bearish territory, pointing down, indicating that GBP/USD could add to losses in the coming days as month-end flows to the dollar could extend the fall.
That being said, the first GBP/USD support would be December 8, 2021, a daily low at 1.3160. A break of the latter would expose 1.3105, followed by 1.3000.
Technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
.jpg "All the sport that can be seen in this summer: here is the programming of Sky from engines to tennis")
