GBP to USD Forecasts: A Run at $1.2350 in the Hands of the BoE Governor
It is a quiet start to the week for the GBP/USD, with no UK economic indicators for investors to consider. The lack of stats will leave the GBP/USD in the hands of market risk sentiment early in the day.
However, Bank of England Governor Andrew Bailey will move the dial late in the US session. The Bank of England Governor will deliver a speech at the London School of Economics.
Your capital is at risk
Bailey has plenty of ground to cover following the better-than-expected retail sales on Friday and banking sector-related jitters. On Friday, Bailey pointed out that the global banking system is in a better place than in 2008. The comments leave the door open for further rate hikes. UK inflation unexpectedly accelerated in February, with the jump in consumption signaling demand-driven price pressures over the near term.
GBP/USD Price Action
This morning, the GBP/USD was up 0.11% to $1.22426. A bullish start to the day saw the GBP/USD rise to an early high of $1.22510.
Technical Indicators
The Pound needs to avoid the $1.2237 pivot to target the First Major Resistance Level (R1) at $1.2284 and the Friday high of $1.2292. A return to $1.2250 would signal an extended breakout session. However, the Pound would need hawkish BoE chatter to support a breakout session.
In the event of an extended rally, the GBP/USD would likely test the Second Major Resistance Level (R2) at $1.2339 and resistance at $1.2350. The Third Major Resistance Level sits at $1.2441.
A fall through the pivot would bring the First Major Support Level (S1) at $1.2182 into play. However, barring a risk-off-fueled sell-off, the GBP/USD should avoid sub-$1.2150 and the second Major Support Level (S2) at $1.2135. The Third Major Support Level (S3) sits at $1.2033.
Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The GBP/USD sits above the 50-day EMA, currently at $1.22040. The 50-day EMA widened from the 200-day EMA, with the 100-day EMA pulling away from the 200-day EMA, delivering bullish signals.
A hold above the 50-day EMA ($1.22040) would support a breakout from R1 ($1.2284) to target R2 ($1.2339) and $1.2350. However, a fall through the 50-day EMA ($1.22040) would bring the Major Support Levels into view. A fall through the 50-day EMA would send a bearish signal.
The US Session
Looking ahead to the US session, it is a quiet day on the US economic calendar. There are no US economic indicators for investors to consider.
The lack of US stats will leave the GBP/USD in the hands of banking sector-related news and FOMC member commentary.