BOE and Fed expected to keep raising rates

While the UK economy was able to avoid a recession, recent years have seen a slowdown in economic growth. It would be the 12th straight rate increase since December 2021, despite the market's continued expectation that the BoE will increase interest rates again next month, this time to 4.5% from 4.25%.

Also last week, the International Monetary Fund (IMF) lowered its projections for global growth and issued a warning about the potential effects of financial sector concerns that could result in a slower rate of growth for the world economy.

This week, the UK will release February employment data on Tuesday, March inflation (CPI) data the following day, and PMI (purchasing managers' index) data on Friday afternoon.

According to the Office for National Statistics in England, the current number of jobs advertised online in the UK as of April 6 was 18% lower than the previous year, while it was 1% higher than the previous week. Meanwhile, increasing food costs caused inflation to rise unexpectedly to 10.4% in February. Analysts predict that the CPI data due out on Wednesday will fall to 9.8% but will remain higher than inflation in Europe and the United States.

On Friday evening, the US dollar pair recovered from one-year lows as the US consumer confidence index rose in April and Federal Reserve policymakers warned that they are not ready to pause rate hikes since inflation is still too high.

The University of Michigan's consumer confidence index rose to 63.5 in April, higher than the forecast and previous figure of 62.0, while households expect inflation to rise to 4.6% from 3.6% over the next 12 months or a year, with the 5-year inflation outlook remaining unchanged at 2.9% for the fifth month in a row.

As a result, most investors expect the Fed to continue raising interest rates at its next policy meeting on May 3, with the Fed Funds futures (FFR) market reflecting an 81% probability that the Fed will raise interest rates another 25 points, despite the Fed acknowledging in the minutes of a central bank meeting in March that there is an increased risk of a recession later this year, resulting in the market expecting the Fed to cut interest rates by the end of the year and predicting that the United States may face a major economic slowdown in the second half of the year.

This week's US economic data includes weekly initial jobless claims, which have been rising due to increased layoffs since the beginning of the year, as well as Existing Home Sales, which are predicted to fall slightly, resulting in the pound tending to decline slightly against the US dollar during this period.

Data for Technical Analysis (5H) CFD GBP/USD

Resistance : 1.2417, 1.2420, 1.2426

Support : 1.2405, 1.2402 , 1.2396        

5H Outlook

Source: Investing.com                                             

Buy/Long 1 If the support at the price range 1.2400 - 1.2405 is touched, but the support at 1.2405 cannot be broken, the TP may be set around 1.2417 and the SL around 1.2397, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1.2417 - 1.2422, TP may be set around 1.2428 and SL around 1.2403, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1.2417 - 1.2422 is touched, but the resistance 1.2417 cannot be broken, the TP may be set around 1.2401 and the SL around 1.2425, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1.2400 - 1.2405, TP may be set around 1.2390 and SL around 1.2419, or up to the risk appetite.       

Pivot Points Apr 17, 2023 03:01AM GMT

Sources: Investing 1, Investing 2