GBP to USD Forecasts: Bulls To Target $1.22 on Risk Sentiment

It is a quiet start to the week for the GBP/USD. After Friday’s better-than-expected GDP numbers, there are no UK economic indicators for investors to consider. The lack of stats will leave the GBP/USD in the hands of market risk throughout the day.

It could be a choppy week for the GBP/USD, with UK employment numbers, the Spring Budget, and the OBR economic forecasts in focus. On Tuesday, the US CPI could also put the cat among the pigeons, with sticky inflation likely to sink the GBP/USD.

With no economic data to consider, there are also no Bank of England Monetary Policy Committee Member speeches for investors to monitor, leaving investors to track chatter with the media.

Away from the economic calendar, Silicon Valley Bank (SIVB) and Signature Bank (SBNY) news drove demand for riskier assets and the GBP/USD. On Sunday, US regulators announced that all customers would have access to their deposits from Monday.

Additionally, the Federal Reserve created a new Bank Term Funding Program to offer loans with a maturity of one year to depository institutions. Institutions would pledge Treasuries and other held assets as security. On Sunday, regulators shuttered Signature Bank, which faced a similar problem, with regulators protecting all depositors.

GBP/USD Price Action

This morning, the GBP/USD was up 0.74% to $1.21185. A mixed start to the day saw the GBP/USD fall to an early low of $1.20539 before rising to a high of $1.21416. The GBP/USD briefly broke through the First Major Resistance Level (R1) at $1.2126.

Technical Indicators

The Pound needs to avoid the $1.2017 pivot to retarget the First Major Resistance Level (R1) at $1.2126 and the morning high of $1.21416. A return to $1.2120 would signal an extended breakout session. However, the Pound would need risk-on-sentiment to support a breakout session.

In the event of an extended rally, the GBP/USD would likely test resistance at $1.22 but fall short of the Second Major Resistance Level (R2) at $1.2223. The Third Major Resistance Level sits at $1.2429.

A fall through the pivot would bring the First Major Support Level (S1) at $1.1920 into play. However, barring a risk-off-fueled sell-off, the GBP/USD should avoid sub-$1.19 and the second Major Support Level (S2) at $1.1811. The Third Major Support Level (S3) sits at $1.1604.

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