. GBP/USD rises above 1.2500 despite weak UK GDP - 13 April 2023

GBP/USD rises above 1.2500 despite weak UK GDP – 13 April 2023

GBP/USD rises above 1.2500 despite weak UK GDP – 13 April 2023

13 Apr 2023

GBP/USD rises above 1.2500 as the US Dollar’s decline begins.

FUNDAMENTAL OVERVIEW

  • Even though the monthly UK GDP and industrial figures fell short of estimates, the GBP/USD continues to rise beyond 1.2500. The US Dollar is once again being sold off, driven by weaker US CPI data, which has rekindled expectations on the Fed cutting interest rates. US PPI statistics awaited.
  • The GBP/USD pair regained momentum and moved above 1.2500 early on Thursday after spending the Asian session in a narrow range just around that mark. The pair’s bullish bias is still present, but it might have a hard time breaking through the 1.2550 resistance soon.
  • Although the market’s expectations for a 25-basis point Federal Reserve (Fed) rate hike in May was unaffected by US March inflation data, the US Dollar (USD) came under intense selling pressure, which supported the GBP/USD advance.
  • Regardless of the outcome of the upcoming rate decision, investors appear to be leaning towards a looser Fed policy in the second half of the year after the annual Consumer Price Index dropped drastically to 5% in March from 6% in February. According to the CME Group Fed Watch Tool, there is approximately a 70% possibility that the Fed’s policy rate will be below the 4.5%-4.75% range by the end of the year. Currently, the Fed’s policy rate is 4.75%-5%.
  • In the American session, market players will continue to pay particular attention to risk perception. The inflation statistics did not help Wall Street’s major indexes, although US stock index futures are trading slightly higher Thursday morning. The USD may find it difficult to maintain its strength relative to its main rivals if US stocks gain traction.

GBP/USD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

  • GBP/USD is currently trading in the up channel.
  • GBP/USD is currently trading above all SMA.
  • RSI is in buying zone, which suggests bullishness, and Stochastic suggests an up trend.
  • GBP/USD resistance is at 1.25216 & its immediate support level is 1.24762

HOW TO TRADE GBP/USD

GBP/USD is trading in an up channel. The price has broken its previous day’s high and currently, it is trading at the key resistance zone, if the resistance is broken, we can see further upside.

TRADE SUGGESTION- BUY AT 1.25118 TAKE PROFIT AT 1.25325, SL AT 1.25002