GBP/USD Forecast: Cabinet reshuffle continues to support Sterling

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3048

UK budget should be presented on March 11, Chancellor Sunak claimed for a 5% saving needed.
A scarce macroeconomic calendar on Monday will likely see GBP/USD extending its consolidation.
GBP/USD could gain bullish potential once beyond 1.3069, last weekly high.

The GBP/USD pair bounced from a daily low of 1.3000 to finish Friday unchanged around 1.3050 and up for the week. The pair held on to Thursday’s gains, triggered by a UK Cabinet reshuffle that ended with Rishi Sunak becoming the new Chancellor of the Exchequer. The market believes he will favour fiscal stimulus, therefore “help” the BOE to avoid cutting rates. The Pound fell after Downing Street’ spokesman said that the UK needs to find 5% savings ahead of the official release of the next budget, scheduled for March 11, although buyers quickly seized their chances and sent it back up.

At the beginning of the new week, the UK will release the February Rightmove House Price Index, hardly a market mover. On Tuesday, however, the UK will publish its latest update on employment.

GBP/USD short-term technical outlook

The GBP/USD pair is neutral-to-bullish in its daily chart, as it settled around a flat 20 DMA, while technical indicators pared their advances after reaching their midlines. The pair, however, bottomed around a bullish 100DMA, which indicates that bulls overlap bears. In the 4-hour chart, the risk is skewed to the upside, although the pair would need to extend its advance beyond 1.3069, the weekly high, to confirm additional gains. In the mentioned time-frame, technical indicators have recovered within positive levels, while the 20 SMA maintains its bullish slope well below the current level.

Support levels: 1.3020 1.2990 1.2945

Resistance levels: 1.3075 1.3110 1.3150

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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