Daily Analysis GBPUSD - 23 June 2023

The UK's GfK Consumer Confidence rose to -24 in June, reaching its highest level since January 2022, surpassing the previous reading of -27 and market expectations of -26. Following this data, Reuters reported that the British economy has managed to avoid a predicted recession. GfK's measure of consumer sentiment regarding the economy for the next 12 months increased from -30 in May to -25, while perceptions of personal finances rose by seven points to -1.

However, it is important to note that concerns about a recession induced by the Bank of England (BoE) continue to put downward pressure on the GBP/USD pair. Surprising the markets, the BoE, also known as the "Old Lady," raised benchmark interest rates by 50 basis points (bps) to 5%, contrary to the widespread expectation of a 0.25% rate hike on Thursday. Nevertheless, the GBP/USD initially spiked but later dropped, as the Over-the-Counter Interest Rate Swap (OIS) pricing indicates an anticipated end to the tightening cycle sooner than expected. Furthermore, the substantial rate hike also reflects the economic challenges amid discussions of a British recession, which in turn exerted downward pressure on the Pound Sterling despite the significant interest rate increase.

During his testimony to the Senate Housing Committee, Federal Reserve Chairman Jerome Powell reiterated most of the remarks he made on the previous day.

The GBP/USD continue the correction going toward the 1.2700 area where it may find support. The long bullish trend still solid.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3200	1.3000	1.2800	1.2650	1.2540	1.2460