GBP/USD:Latest Market Update and Analysis – 8 May 2023
08 May 2023
GBP/USD maintains a higher level near 1.2650.
GBP/USD has dropped from the one-year high it reached at 1.2670 earlier in the day on Monday, moving towards the mid-1.2600s. The pair’s potential gain is constrained by the market’s cautious stance ahead of the Fed’s Loan Officer Survey, while overall market activity is still muted.
GBP/USD has slightly declined since Monday’s Asian trading hours, when it reached its highest point in almost a year at 1.2650. The technical prognosis for the pair indicates that, should buyers fail to protect 1.2625, the technical downward correction may continue.
Even though the US data released on Friday showed that the labour market remained tight in April, the US Dollar was unable to draw in investors. Prior to the weekend, financial equities recovered as concerns about more US bank failures subsided. Late Friday, the risk-positive market environment also contributed to the GBP/USD’s upward movement.
US stock index futures trade in a mixed manner early on Monday, suggesting a cautious market outlook. The US Federal Reserve (Fed) will publish the results of the first quarter’s Senior Loan Officer Opinion Survey in the late American session. Investors may start looking for safety if that release reminds them of the detrimental effects of the Fed’s restrictive stance on financing conditions and resurrects worries about a worsening banking crisis.
In the event of risk aversion, GBP/USD should struggle to maintain its upward momentum. However, dovish Fed views have made it difficult for the USD to benefit from flows into haven assets.
However, ahead of the US April inflation report on Wednesday and the Bank of England (BoE) policy decisions on Thursday, investors might hold off on placing significant bets.
GBP/USD TECHNICAL ANALYSIS DAILY CHART:
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 up trend.
GBP/USD resistance is at 1.26529 & its immediate support level is 1.26317
HOW TO TRADE GBP/USD
The price of the GBP/USD currency pair is currently testing and trading at a resistance zone; if this zone is broken and the price remains above it, further upside is expected.