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The Pound Received Support from the Data on Business Activity

2/22/2023 10:56 AM

The GBP/USD pair is trading with mixed dynamics, holding near 1.2100.

The day before the pound showed a noticeable increase, reacting to the publication of macroeconomic statistics from the UK. The Manufacturing PMI rose from 47.0 points to 49.2 points, remaining in the stagnation zone, and the Services PMI increased from 48.7 points to 53.3 points, entering the growth zone. The Composite PMI for the same period corrected from 48.5 points to 53.0 points against the forecast of 48.7 points. The British government reported on the January budget surplus of 5.42 billion pounds, which was achieved thanks to tax revenues for the month (21.9 billion pounds). Experts believe that this will provide additional funds to support the economy. Analysts took the strong statistics on business activity as a positive signal after a period of stagnation. In addition, low energy prices suggest that the British economy may be able to avoid a deep recession. This also means that the Bank of England will stick to the policy of high rates for a little longer than originally planned. However, the problem of high inflation in the UK is still quite acute.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is slightly changing, reflecting ambiguous dynamics of trading in the short term. MACD has reversed to growth having formed a new buy signal (located above the signal line). Stochastic shows a more confident uptrend, rapidly approaching its highs, which indicates the risks of the British currency being overbought in the ultra-short term.

Resistance levels: 1.2150, 1.2192, 1.2240, 1.2311. | Support levels: 1.2084, 1.2000, 1.1900, 1.1800.

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