. GBP/USD Daily Market Update And How to Invest in AUD/USD

GBP/USD Daily Market Update And How to Invest in AUD/USD

GBP/USD Daily Market Update And How to Invest in AUD/USD

10 May 2023

GBP/USD rises above 1.2650 to a new daily high

FUNDAMENTAL OVERVIEW

The GBP/USD exchange rate has gathered momentum and climbed to a new daily high above 1.2650. The US Dollar finds it difficult to find demand following the initial response to US inflation statistics, which revealed that the annual Consumer Price Index stood at 4.9% in April.

After exhibiting erratic behaviour on Tuesday, the GBP/USD pair has been fluctuating up and down in a narrow range above 1.2600 since early Wednesday. A short-term reaction in the pair could be caused by the US inflation report for April before the Bank of England (BoE) releases its policy announcements on Thursday.

Despite risk aversion, the US Dollar Index continued to improve on Tuesday, although GBP/USD was able to maintain its position. Due to the potential for a surprise hawkish BoE, investors appear hesitant to wager on the weakening of the British pound. Based on recent UK statistics, HSBC recently stated that it sees a “few” votes for a 50-bps increase as a possibility.

Considering tighter financial circumstances, market investors continue to be quite confident that the US Federal Reserve would pause its tightening cycle in June. A Core CPI increase in April that was larger than anticipated could prompt investors to reevaluate the Fed’s rate stance and boost the US Dollar (USD) in the short run. On the other hand, a weak monthly core inflation reading should support rising GBP/USD rates.

With the BOE’s rate decision approaching, the GBP/USD reaction might not be robust enough to offer a directional cue.

GBP/USD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

GBP/USD is currently trading in up channel.

GBP/USD is currently trading above all SMA.

RSI is in buying zone which suggests bullishness and Stochastic is suggesting no trend.

GBP/USD resistance is at 1.26313 & its immediate support level is 1.26066

HOW TO TRADE GBP/USD

GBP/USD is now breaking its previous day’s high and is trading in an uptrend. It will continue to rise unless there is a trend reversal, so remain bullish.

TRADE SUGGESTION- BUY AT 1.26313, TAKE PROFIT AT 1.26683, SL AT 1.26066