POUND STERLING ANALYSIS & TALKING POINTS

• All eyes shift to economic data to guide monetary policy forecasts.
• Fed and BoE speakers to come.
• GBP/USD holds above 1.22 within bear flag.

GBPUSD FUNDAMENTAL BACKDROP

The British pound kicks off the trading week marginally higher against the US dollar after a significant depreciation last week. A hawkish Fed Chair Jerome Powell kept the greenback supported throughout as markets prepare for key economic data from both the UK and US throughout the week. Earlier this morning Rightmove announced that UK housing prices have fallen at its quickest pace in five years reiterating the tight credit conditions as a result of high interest rates delivered by the Bank of England (BoE).

Source: Office for National Statistics

TECHNICAL ANALYSIS

GBP/USD DAILY CHART

Chart prepared by Warren Venketas, IG

Daily GBP/USD price action trades between the 50-day moving average (yellow) and the 1.2200 psychological handle, while continuing within the developing bear flag pattern (black). The Relative Strength Index (RSI) highlights hesitancy at the moment hovering around the midpoint level. Short-term directional bias will be attained through the upcoming data releases.

Key resistance levels:

• 200-day MA (blue)
• Flag resistance
• 1.2308
• 50-day MA (yellow)

Key support levels:

• 1.2200
• 1.2100/Flag support
• 1.2000
• 1.1804

MIXED IG CLIENT SENTIMENT (GBP/USD)

IG Client Sentiment Data (IGCS) shows retail traders are currently net LONG on GBP/USD with 69% of traders holding long positions (as of this writing).

https://www.dailyfx.com/news/forex-gbp-price-forecast-pound-tentative-as-key-uk-us-data-looms-wv-20231113.html