Solid News
GBPUSD Keep Price above 1.1950
2/23/2023 12:04 PMThe GBP/USD pair broke 1.1950, poised to continue its upward momentum amid positive economic statistics and investors' expectations of a continuation of the hawkish rate of the Bank of England at the next meeting on March 23, as officials believe that the inflation rate will fall to 3.5% by the end of the year, and in 2024 – up to 1.0%.
The Chartered Institute for Purchasing and Supply (CIPS) released Tuesday's report that the manufacturing PMI was 49.2, better than the 47.5 forecast and higher than the previous 47.0, while the service PMI is at 53.3 points, higher than expected at 49.2 points and above 48.7 points. The composite PMI reached 53.0 points, exceeding the forecast of 49.0 points and the previous value of 48.5 points. The aggregate value of private sector production increased to 53.0 points in February from 48.5 points earlier, well above the expected value of 49.0 points. Thus, British companies show positive dynamics for the first time in six months, which increases the likelihood of avoiding a recession in the economy.
A negative factor for the asset is the actions of the American regulator: according to the protocols of the Federal Open Market Committee of the US Federal Reserve (FOMC) published yesterday, officials support a further reduction in the balance sheet (QT), note the need for a restrictive monetary policy and tend to increase the interest rate by 25.0 basis points at the next meeting on 22 March.
The long-term trend remains upwards with the key support at 1.1950. As long as the trading instrument is above it, it is worth considering long positions with the target at the January high of 1.2450, and if it breaks down, the trend will change downwards, and then it will be possible to consider selling the asset with the target at 1.1550.
The medium-term trend is upwards. Last week, the quotes unsuccessfully tested the key trend support 1.1999–1.1954, so this week, there is still a possibility of growth with the target around 1.2471–1.2435. If this area is broken down, the trend will change downwards with the target in zone 2 (1.1551–1.1506).
Resistance levels: 1.2450, 1.2650, 1.2990. | Support levels: 1.1950, 1.1550.