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The GBPUSD is Preparing to Update the December High

3/31/2023 1:02 PM

The GBP/USD pair is approaching the December maximum at 1.2450 on the background of positive data on the gross domestic product (GDP) of the UK.

Thus, the economy in Q4 2022 added 0.6% in annual terms, exceeding analysts' forecast of 0.4% and the previous value of 0.2%, and in quarterly terms the indicator increased by 0.1% after -0.3% in the previous period with expected zero dynamics. The released data had a positive impact on investor sentiment, calling into question the onset of a recession this year, if the positive trend continues after the release of GDP statistics for Q1 2023.

In turn, the USD is losing ground after the publication of US GDP data for Q4 2022: in quarterly terms, the economy adjusted to 2.6% from 3.2%, although analysts had expected a milder slowdown to 2.7%. Nevertheless, US Fed officials still believe that another interest rate increase is needed before the end of the year in order to reduce high inflation. If such a decision is made, it may prevent the strengthening of the British currency, and until then, the GBP/USD pair will probably be able to update the December maximum and possibly reach the next level of 1.2650.

The long-term trend is upward. The GBP/USD pair is approaching the resistance level of 1.2450, in case of its breakout, the next growth target will be 1.2650, after which the movement will continue to the area of 1.2990. If the 1.2450 mark is held, a downward trend with a target at 1.2168 and a shift of the trend boundary to the 1.1800 level is likely. If the price reaches any of the support levels within the correction, it is worth considering new purchases of the instrument with a target at 1.2450.

The mid-term trend changed to an upward one this week, after the target zone 1.2296-1.2251 was broken by the bidders, and now the target is 1.2744–1.2699. The key support for the new trend is shifting to the levels of 1.1975–1.1930, and if it is reached within the correction, it will be possible to consider purchases with the first target at 1.2415.

Resistance levels: 1.2450, 1.2650, 1.2990. | Support levels: 1.2168, 1.2000, 1.1800, 1.1495.

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