GBP/USD aims to recapture 1.2300 as higher UK CPI solidifies rate hike from BoE, USD retreats


  • GBP/USD is aiming to recapture the 1.2300 resistance on hopes of an eleventh consecutive rate hike by the BoE.
  • The USD Index has retreated as further credit tightening to safeguard the US banking system would cool off demand.
  • The rollback of support for all bank deposits by US Janet Yellen triggered a sell-off in US equities.

The GBP/USD pair is looking to recapture the round-level resistance of 1.2300 in the Asian session. The Cable has rebounded after a vertical correction to near 1.2260 as the street anticipates that the absence of hawkish interest rate guidance from Federal Reserve (Fed) chair Jerome Powell while addressing the economy in the monetary policy meeting reflects that the Fed is close to ending its policy-tightening spell.

S&P500 futures have generated some gains in the Asian session after a plunge on Wednesday as Fed Powell has confirmed that the battle against the sticky United States inflation is continued. Fed Powell has said no to rate cuts in 2023 as taming the stubborn inflation is still a hard nut to crack. Apart from that, US Treasury Secretary Janet Yellen’s statement that the government "is not considering insuring all uninsured bank deposits," renewed fears of a banking sector meltdown.

The US Dollar Index (DXY) has retreated after a recovery move on hopes that further credit tightening to safeguard the banking system would cool off overall demand, the scale of economic activities, and inflation. Meanwhile, the appeal for US government bonds has increased amid expectations of a pause in further policy restriction and rollback of support for all bank deposits by US Janet Yellen.

On the United Kingdom front, the Pound Sterling is likely to remain solid as the Bank of England (BoE) is going to hike rates consecutive for the eleventh time. A 25 basis point (bp) interest rate hike is expected from BoE Governor Andrew Bailey as UK’s inflation has been lifted higher by soaring prices of food and non-alcoholic drinks and higher energy costs.

The interest rate decision by the BoE is going to be a tough one as policymakers were split about hiking rates further or keeping them steady amid global banking turmoil.

GBP/USD

Overview
Today last price 1.2287
Today Daily Change 0.0022
Today Daily Change % 0.18
Today daily open 1.2265
 
Trends
Daily SMA20 1.2057
Daily SMA50 1.2146
Daily SMA100 1.2073
Daily SMA200 1.1894
 
Levels
Previous Daily High 1.2336
Previous Daily Low 1.2209
Previous Weekly High 1.2204
Previous Weekly Low 1.201
Previous Monthly High 1.2402
Previous Monthly Low 1.1915
Daily Fibonacci 38.2% 1.2287
Daily Fibonacci 61.8% 1.2257
Daily Pivot Point S1 1.2204
Daily Pivot Point S2 1.2143
Daily Pivot Point S3 1.2077
Daily Pivot Point R1 1.2331
Daily Pivot Point R2 1.2397
Daily Pivot Point R3 1.2458

 

 

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