28.03.2023 09:24 AM
Hot forecast for GBP/USD on 28/03/2023

Completely empty macroeconomic calendar and silence from the Bank of England, but the pound fully recouped its losses and returned to the previous week's highs. And it's all about the European Central Bank. More precisely, the ECB representatives and their statements fueled the single currency, which pulled the British pound with it. The words of Isabelle Schnabel were quite interesting, as she almost directly said that we should get ready for a long period of relatively high interest rates. In her speech, she repeatedly referred to the pre-2008 trend in interest rates, arguing that current conditions are far more difficult, and the average interest rate should be slightly higher than it was then. Until the 2008 crisis, interest rates in Europe used to vary between 2.00% and 4.75%, with an average of around 3.00%. From this we can conclude that even the forthcoming rate hike will not be the last. Moreover, an interest rate cut is out of the question for the time being. In addition, Schnabel assured that the ECB has sufficient resources and the necessary tools to prevent the banking crisis. In general, the single currency was rising and pulled the pound with it. Given the fact that the British currency returned to the local highs, its further growth will be somewhat difficult, and most likely, the market will consolidate around the achieved values.

GBP/USD recovered its value relative to the recent pullback. As a consequence, the quote has climbed above 1.2300, which points to the growth in the volume of long positions

On the four-hour chart, the RSI technical indicator is hovering in the upper area of 50/70, which reflects bullish sentiment.

On the same time frame, the Alligator's MAs are intersecting each other, which points to the intermediate signal.

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Staying above 1.2300 will lead to the continuation of the upward cycle. However, the 1.2400/1.2450 area, which is the peak of the medium-term uptrend, will put pressure on the bulls and the long positions.

The complex indicator analysis unveiled that in the short-term and intraday periods, indicators are focused on the uptrend cycle.

Dean Leo,
Analytical expert of InstaForex
© 2007-2023
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