empty
 
 
24.03.2023 12:25 PM
GBP/USD: technical analysis on March 24, 2023. BoE raises rates for 11th time

Hello, dear traders! On the 1-hour chart, GBP/USD bounced off 1.2342, reversed to the downside, and headed toward 1.2238 and the lower limit of the ascending corridor. This line illustrates a bullish bias. Consolidation below the corridor will cause a shift in market sentiment to bearish. The price may then head toward the 127.2% Fibonacci level of 1.2112.

This image is no longer relevant

The Bank of England raised rates by 25 basis points yesterday, the highest level since 2008. Seven members of the Monetary Policy Committee voted for a hike and two voted against it. The regulator stressed that a spike in volatility triggered by the meltdown of several banks in the US and the merger of Swiss bank Credit Suisse had had no effect on Britain's banking system. It stayed resilient and showed good liquidity. The central bank also did not rule out the possibility of further rate increases in the future.

In my view, the BoE will probably raise rates a few more times this year. Economists are now increasingly concerned that the regulator has already lost the battle against persistent inflation. In February, it again accelerated without even dropping below 10%. Thus, interest rates have been lifted 11 times, and inflation declined thrice. The central bank should get even more aggressive. However, the British economy may severely suffer in that case. The situation with inflation in the UK is one of the toughest across developed countries.

This image is no longer relevant

In the 4-hour chart, the pair reversed to the downside after the formation of a bearish MACD divergence. The price is now on its way to the 127.2% Fibonacci level of 1.2250. Its movement is slow, but consolidation below the mark will increase the likelihood of a bearish continuation toward 1.2008. There is also growth potential should the quote close above the descending trend corridor.

Commitments of Traders:

This image is no longer relevant

The bearish sentiment of non-commercial traders decreased last week. However, we are now talking about reports from two weeks ago. The CFTC has not provided fresh data yet. Speculators opened 7,549 new long positions and 1,227 short ones. Overall, sentiment is still bearish with a wide gap between shorts and longs. Over the past several months, the pound has gained potential, but there is still a gap between positions in March. The pound has been in a flat trend for a few months now. In the 4-hour time frame, the pair has left the limits of the descending corridor, which may provide support for the pound. Anyway, there are now many contradicting factors, and traders have mixed views regarding the pair.

Macroeconomic calendar:

United Kingdom – Retail Sales (07-00 UTC); Manufacturing PMI (09-30 UTC); Services PMI (09-30 UTC).

United States – Durable Goods Orders (12-30 UTC); Manufacturing PMI (13-45 UTC); Services PMI (13-45 UTC).

The macroeconomic calendar contains a few interesting reports on Friday. Therefore, fundamental factors may have a mild influence on market sentiment.

Outlook for GBP/USD:

The trading plan will be to sell after a bounce off 1.2342, targeting 1.2238. If the pair closes below 1.2238, we sell with the target at 1.2112. On a bounce off 1.2238, we buy with targets at 1.2342 and 1.2432.

Samir Klishi,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback