It is another quiet session for the GBP/USD. There are no UK economic indicators for the markets to consider today. The lack of stats will leave the GBP/USD in the hands of market risk sentiment and China inflation numbers ahead of the US session.
A lack of stats will leave investors to consider Bank of England Monetary Policy Committee Member speeches. However, no Monetary Policy Committee Members are on the calendar to speak, leaving investors to monitor chatter with the media.
On Wednesday, the British Chamber of Commerce (BCC) delivered much-needed GBP/USD support. The BCC upwardly revised its UK economic forecast for 2023. The BCC expects the UK economy to contract by 0.3% in 2023 versus a previous forecast of 1.3%. Significantly, the BCC forecasts the UK to avoid a recession, projecting growth in the final two quarters of 2023.
GBP/USD Price Action
This morning, the GBP/USD was up 0.05% to $1.18489. A mixed start to the day saw the GBP/USD fall to an early low of $1.18285 before steadying.
The Pound needs to avoid the $1.1835 pivot to target the First Major Resistance Level (R1) at $1.1867. A move through the Wednesday high of $1.18589 would signal an extended breakout session. However, the Pound would need dovish Fed chatter and US stats 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 $1.1892 and resistance at $1.19. The Third Major Resistance Level sits at $1.1948.
A fall through the pivot would bring the First Major Support Level (S1) at $1.1811 into play. However, barring a risk-off-fueled sell-off, the GBP/USD should avoid sub-$1.1750. The second Major Support Level (S2) at $1.1778 should limit the downside. The Third Major Support Level (S3) sits at $1.1721.
The US Session
Looking ahead to the US session, it is a quieter day on the US economic calendar. Following the better-than-expected ADP nonfarm employment change and JOLTs Job Openings on Wednesday, the focus will turn to the jobless claims report.
Economists forecast initial jobless claims to rise from 190k to 195k, which would continue to signal tight labor market conditions. Following two days of Fed Chair Powell’s testimony, investors should also monitor FOMC member chatter ahead of the blackout period that begins on March 11.