Forex analysis and forecast for GBP/USD for today, January 24, 2023

GBP/USD, currency, Forex analysis and forecast for GBP/USD for today, January 24, 2023

In anticipation of the release of the UK manufacturing and service sector business activity indices (9:00 GMT), GBP/USD remains in a tight price range just below important resistance at 1.2400 on Tuesday.

Service sector business activity is expected to remain at 49.9 and manufacturing sector activity is expected to decline from 45.3p to 45.0p.

The situation in the UK remains difficult. Deteriorating quality of life forces citizens to go on strike demanding higher wages. But the government cannot take this step because additional money would support inflation. The Cabinet of Ministers is trying to find other ways to solve social problems, in particular through targeted financing, but so far government measures are clearly insufficient.

In addition, British business is sounding the alarm bells. Rising energy costs are undermining many small companies, so entrepreneurs are asking the government to take a stimulus package, which the Bank of England does not agree with, as this step will soften the financial conditions and give impetus to a new round of inflationary spiral.

GBP/USD Technical analysis

On the daily chart the Bollinger indicator remains in the rising phase while the MACD is showing a trading divergence and starts to decline towards the zero line, keeping a buy signal.

The Stochastic oscillator flies along the 80% line.

After the price fixes above the key resistance at 1.2400, we return to buy with the target at 1.2600. Placement of a stop loss at 1.2311.

On a rebound from 1.2400 we will wait for breakdown of support at 1.2311. From here we form short positions with Take Profit at 1.2150. Stop-loss is taken to 1.2400.

Chart - Forex analysis and forecast for GBP/USD for today, January 24, 2023
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