Buyers Remain in Control in GBP/USD, As It Returns Above Resistance
GBP/USD has resumed the bullish trend after a series of weak economic reports from the UK and softer FED rhetoric
GBP/USD turned bullish in March and increased around 7 cents until the first week of April, as the USD retreated lower on the banking crisis, while UK banks were largely unafected. The price broke above the resistance around 1.2450s and climbed above 1.25, although it retreated lower since last Friday, after the stronger NFP report from the US.
The 50 SMA (yellow) was broken on the H4 chart, but the 100 SMA (green) held as support and we saw a bounce from these on Tuesday. The GBP continued to increase in value ahead of three key economic events for this pair this week, and jumped higher after the US consumer inflation report which was released yesterday.
Core CPI (consumer price index) inflation ticked higher to 5.6%, although the headline number fell to 5.0% last month from 6.0% in February, which set the USD tumbling lower and this pair surging higher once again. GBP/USD jumped nearly 100 pips higher, but it failed to take out the major level at 1.25.
The bullish momentum continued for GBP/USD, following the release of the Federal Reserve Open Market Committee (FOMC) meeting minutes from the last meeting, which showed that officials discussed the possibility of pausing the tightening cycle. As a result, the GBP/USD is currently trading at 1.2489 after reaching a daily low of 1.2398. The February GDP report from the UK was released earlier this morning,
GBP/USD H4 Chart – The 100 SMA Held As Support
UK February Monthly GDP Report
- February GDP 0.0% vs +0.1% m/m expected
- Prior +0.3%; revised to +0.4%
- GDP +0.1% vs 0.0% 3m/3m expected
- Prior 0.0%
UK GDP is estimated to show no growth in February, whereby falls in services (-0.11%) and production (-0.03%) were offset by growth in construction (+0.15%). As things stand, the monthly GDP is now estimated to be 0.3% above its pre-pandemic level i.e. February 2020.
GBP/USD Live Chart
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