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The Pound is Trying to Correct after a Rapid Friday Decline
3/27/2023 11:27 AMThe GBP/USD pair is trading with a weak upward momentum, trying to correct after falling at the end of last week.
The pound showed a decrease on Friday after the publication of macroeconomic statistics from the UK on the level of business activity in March. The Services PMI from S&P Global corrected from 53.5 points to 52.8 points, which turned out to be worse than the expected 53.0 points, the Manufacturing PMI decreased from 49.3 points to 48.0 points against the forecast at 49.8 points, and the Composite PMI declined from 53.1 points to 52.2 points, while experts expected 52.8 points. The national economy remains under pressure from high consumer prices and interest rates from the Bank of England. At the moment, the UK is the only G7 country with double-digit inflation and whose economy has not yet returned to pre-crisis levels. In turn, the February statistics on Retail Sales turned out to be positive: on a monthly basis, the value rose by 1.2% instead of the expected 0.2%, and on an annual basis it lost 3.5%, being significantly better than the forecast at the level of -4.7% .
Similar statistics from the US turned out to be noticeably stronger. The Services PMI in March rose from 50.6 points to 53.8 points, contrary to forecasts of a decline to 50.5 points, and the Manufacturing PMI rose from 47.3 points to 49.3 points, while the forecast was to fall to 47.0 points.
Today, the focus of investors is on the speech of the Governor of the Bank of England, Andrew Bailey, who is likely to speak about the immediate prospects for the regulator's monetary policy, and at the end of the week, revised data on the dynamics of the UK's Gross Domestic Product (GDP) for the fourth quarter of 2022 are expected to be published.
Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting ambiguous nature of trading in recent days. MACD reversed into a descending plane, having formed new sell signal (located below the signal line). Stochastic shows a more confident decline and is currently located approximately in the center of its area, signaling in favor of the further development of the "bearish" trend in the near future.
Resistance levels: 1.2236, 1.2283, 1.2350, 1.2400. | Support levels: 1.2176, 1.2140, 1.2100, 1.2054.
