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GBPUSD:
The GBP/USD pair continues to show signs of instability near the 1.3000 mark, as cable traders enter a period of uncertainty following a recent recovery. The pair has not yet undergone a confirmed pullback, as both sterling and greenback traders await firmer indications of economic health from both economies.
On Tuesday, the US Conference Board (CB) reported a further increase in expectations for one-year inflation, with it now expected to be 6.2 per cent in March, up from 5.8 per cent in February. Consumers continue to voice significant concerns about the sustained high prices of essentials such as eggs, as well as the potential inflationary effects of the Trump administration’s tariffs. The central bank’s survey of consumer confidence about future economic expectations fell to a new 12-year low in March, recording a reading of 65.2, well below the 80.0 threshold that often indicates a potential recession.
Earlier on Tuesday, Moody’s, a leading ratings agency, issued a cautionary statement, highlighting a deterioration in the US fiscal sustainability, particularly concerning the escalating challenges in the affordability of servicing US debt. Moody’s has indicated that this is the result of a multi-year downward trend in fiscal sustainability, a development that is likely to be disconcerting for Donald Trump and his administration, who are currently lobbying Congress for a significant increase in the debt limit.
UK inflation data is scheduled for release on Wednesday, which could provide a boost to the value of the pound. According to average market forecasts, annual CPI inflation is expected to fall to 2.9% y/y from the previous reading of 3.0%, but the monthly figure is expected to accelerate to 0.5% m/m in February. In January, CPI initially fell by 0.1%, and traders will be monitoring the data closely to see if there is a strong revision to the latest figures.
Trading recommendation: SELL 1.2905, SL 1.2985, TP 1.2815
Origin: FreshForex
