Technical Analysis

GBP/USD Price Analysis – June 12, 2023

By LonghornFX Technical Analysis
Jun 12, 20233 min

Daily Price Outlook

The GBP/USD pair has entered a consolidation phase of around 1.2580 after initially moving higher during the London session. The Cable aims to resume its upward trajectory and surpass the key resistance level 1.2600. Meanwhile, the US Dollar Index (DXY) has faced a strong resistance near 103.70, leading to a corrective pullback.

In the European session, S&P500 futures continue to advance as the probability of the Federal Reserve (Fed) adopting a neutral interest rate policy stance increases. Positive market sentiment prevails as Fed Chair Jerome Powell’s decision to pause monetary policy tightening alleviates concerns about a potential US recession. A report from Goldman Sachs indicates a reduced likelihood of a US economic recession, dropping from 35% to 25%.

The US Dollar Index (DXY) is expected to tread cautiously as investors await the release of the US Consumer Price Index (CPI) data scheduled for Tuesday. Projections suggest a slower acceleration of 0.3% in the monthly headline CPI compared to the 0.4% rise in April. The monthly core inflation is anticipated to remain stable at 0.4%.

Federal Reserve Chair Jerome Powell and his colleagues express concerns about persistent core inflation due to robust demand for durable goods and services. It is worth noting that the US service sector contributes two-thirds of the country’s Gross Domestic Product (GDP).

In the realm of the Pound Sterling, market participants eagerly anticipate the release of the UK Employment data for May. Estimates indicate a decrease of 9.6K in the Claimant Count Change, in contrast to the significant increase of 46.7K reported in April. The Unemployment Rate for the three months is expected to rise to 4.0% from the previous release of 3.9%.

Additionally, attention will be focused on a speech by Bank of England (BoE) Governor Andrew Bailey. Investors will closely monitor any indications regarding future monetary policy actions from the BoE.

GBP/USD Price Chart – Source: Tradingview

GBP/USD – Trade Idea

The GBPUSD pair is making positive strides, gearing up to continue its anticipated bullish run shortly, fueled by the momentum from the recently formed double-bottom pattern. We’re setting our sights on an impressive target of 1.2680 as the pair climbs.

However, the current Stochastic indicator hints at a little turbulence; we might witness some sideways zigzagging before the pair gets its rocket boosters back on.

Take note, though, if the pair slips below 1.2545, it’s like walking on a tightrope as it may dive into testing critical support at 1.2470 before taking another shot at the moon.

Keep an eagle eye on the 1.2500 support and 1.2660 resistance levels for today’s trading landscape.



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