Forex Analysis & Reviews: 10.03.2023 - Hot forecast for GBP/USD on...

10.03.2023 09:27 AM

Hot forecast for GBP/USD on 10/03/2023

At first glance, it is not surprising that the pound was able to show quite good growth yesterday, as the data on unemployment claims in the United States was not only worse than expected, but also pointed to a clear deterioration of the situation in the labor market. For example, the number of initial applications has grown by 21,000 instead of the expected 2,000. The number of new applications, which was expected to fall by 5,000, jumped by 69,000. It turns out that the data only confirmed the validity of this growth. While its main reason was because the pound was oversold. The most important thing is that all the labor market data is coming out in different directions and it is quite obvious that the content of the report, which will be published today by the U.S. Labor Department, will be very different from the forecasts. It is just not clear in which direction it will head.

The number of jobless claims (United States):

Anyway, the start of the trading day isn't going to be very good for the pound as the pace of industrial production decline is expected to accelerate from -4.0% to -4.8% in Great Britain. Moreover, monthly GDP data is not expected to be very encouraging either as it should show a -0.2% drop of the economy. So the British economy is steadily sliding into recession.

Industrial production (UK):

The main event not only of the day, but also of the week, is the report of the United States Department of Labor. If we proceed from current forecasts, which are the only ones we can rely on for the time being, then everything looks good. With a stable level of unemployment, 210,000 new jobs should be created outside of agriculture. This is enough to keep the unemployment rate, which is already incredibly low, stable. And results like that should help the dollar strengthen. The problem is that the data will most likely not match the forecasts. But it's hard to tell whether it will be better or worse. In other words, investors will not take chances and will wait for the report and then they will make their decision.

Unemployment Rate (United States):

GBPUSD reduced the volume of short positions around 1.1800. As a result, there was a slowdown in the bearish cycle, and then the quote reversed. This movement caused the pound to recover relative to its decline on March 7.

On the four-hour chart, during the process of recovery, the RSI crossed the 50 middle line and made its way upwards. This confirms the bullish sentiment.

On the same chart, the Alligator's MAs are intertwined with each other. This is the primary signal of the slowdown of the downward cycle. One the one-day chart, the indicator lines are directed downwards, which corresponds to the downward movement from the beginning of February.

Outlook

As a result, the quote returned to the lower limit of the horizontal channel (1.1920/1.2150) it had already passed. At the moment, the 1.1920/1.1950 area may serve as resistance, and in terms of technical analysis, this can reduce bullish sentiment on the pound. This in turn allows the price to rebound.

However, in case the bullish sentiment persists among traders, and the quote is able to stay above 1.2000, then the pound can rise further.

The complex indicator analysis in the short-term and intraday periods indicate an upward bias or bullish sentiment, this is because the price bounced from 1.1800.

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