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24.03.2023 08:33 AM
Breaking forecast for GBP/USD on March 24, 2023

The BoE once again raised the benchmark rate by 25 basis points. Just a day before that, there was a likelihood of the 50-basis-point increase caused by an unexpected acceleration in inflation. However, the regulator continues to say that inflation will slacken considerably by the end of the second quarter. What is more, two board members voted for the remaining the key rate unchanged. It is quite possible that the BoE will start the monetary policy loosening in the near future. Yesterday's hike could be the last one in the cycle. Against the backdrop, the pound sterling failed to grow higher, settling at the earlier reached levels.

BoE Key Interest Rate

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Today, the British pound is likely to face pressure and start losing value. The decline will hardly be caused by the UK retail sales report that may show the same decrease of 5.1%. Meanwhile, preliminary estimates on the PMI indices are expected to be the key reason for a drop in the national currency. Business activity in the UK services sector may fall, while in the US, the indicator may increase. The services sector is the key one in both countries as it stands for at least 2/3 of the economies.

In this light, the pound/dollar pair inched down after touching the resistance level of 1.2300. Although the number of long positions dropped, the market sentiment remained bullish. This is proved by almost full recovery of the pound sterling after a slump in February.

On the four-hour and daily charts, the RSI technical indicator is hovering in the upper area of 50/70, which points to the bullish sentiment.

On the same time frames, the Alligator's MAs are headed upwards, which corresponds to the current upward cycle.

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Outlook

The bounce may be considered a part of the change in the market sentiment. If the price exceeds 1.2300, traders will get a signal of a rise in the number of long positions. This, in turn, may lead to the continuation of the upward cycle, thus allowing the pair to reach a new high of the mid-term trend.

The downtrend will be considered by traders if the quote slides below 1.2200.

In terms of the complex indicator analysis, we see that in the short-term period, technical indicators are pointing to a bounce. Meanwhile, in the intraday and mid-term periods, the indicators are reflecting an upward cycle.

Dean Leo,
Analytical expert of InstaForex
© 2007-2024
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