2023-05-23 • Updated
The Bank of England (BoE) has dramatically shifted its economic forecasts. They no longer expect a recession in the UK and have upgraded their growth projections. This year, the BoE predicts GDP growth of +0.25%, a significant improvement from previous expectations. Next year's forecast is even more optimistic, with a projected growth of 0.75%. However, let's not get too carried away—the outlook remains subdued, with growth below 1% until 2025. The UK economy is still fragile, as evidenced by lackluster performance in the first quarter of 2023. On the inflation front, the BoE expects a decline over the year but at a slower pace than previously anticipated. Inflation is now projected to be around 5% by the end of this year and is not expected to fall below the 2% target until 2025. The recent interest rate hike suggests that further tightening may be on the horizon, especially considering the upgraded growth and inflation forecasts. So, keep your eyes peeled for potential developments in monetary policy.
GBPUSD - Daily Timeframe
From the chart above, it is clear that the price is at a key level - a pivot zone. Considering the break above the previous high, the support from the 50-Day moving average, and the arrangement of the moving averages in increasing order, I will maintain a bullish sentiment on this commodity until the price breaks below the pivot zone.
Analyst’s Expectations:
Direction: Bullish
Target: 1.25873
Invalidation: 1.23420
GBPAUD - H4 Timeframe
GBPAUD presents a very tricky case. We see price trading within the consolidation channel while pulling a dance between the 50-period and 100-period moving averages. We haven’t seen a touch of the resistance trendline of the channel. Hence, my argument is in favor of bullish price action. Combine that with the confluence from the trendline support and the 200-period moving average, and you will see why I expect a bullish price action.
Analyst’s Expectations:
Direction: Bullish
Target: 1.87952
Invalidation: 1.86353
GBPNZD - H4 Timeframe
The moving averages on GBPNZD signal an overall bearish market, but it is good to scalp a few bullish pips in between. My bullish sentiment is based on the confluence of the trendline support and the pivot zone - maybe not be a strong argument, but I will be watching for a clear reaction from the pivot zone as my entry cue.
Analyst’s Expectations:
Direction: Bullish
Target: 1.99571
Invalidation: 1.97104
GBPJPY - Daily Timeframe
This pivot zone on GBPJPY can be traced to the Monthly timeframe. The zone has also been retested a few times - serving as an area of liquidity grab from the previous high. In this scenario, as in the case of GBPNZD, the confluences seem scanty - making it a daring trade. That is why my entry will be timed to follow a notable reversal candlestick pattern, without which I wouldn’t bother taking a trade on GBPJPY at all!
Analyst’s Expectations:
Direction: Bearish
Target: 169.349
Invalidation: 174.048
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
You can access more of such trade ideas and prompt market updates on the telegram channel.
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