After a two-day decline with a renewal of the low of March 10, GBPUSD starts to recover its losses on Thursday. During the Asian session the pair tested the resistance 1.2080 to break up.
Today the U.S. will release a report on jobless claims and construction industry statistics. Tomorrow, the University of Michigan will release consumer confidence index for February. The index is expected to retain its previous value of 67.0 p.
Yesterday the UK Finance Minister presented to the Parliament the draft budget for the current year according to which GDP is expected to fall by 0.2% which is better than the initial version which envisaged a 1.5% decline.
The Cabinet of Ministers expects the economic downturn to end this year. Next year GDP is expected to grow by 1.8%, in 2025 - by 2.5%. At the same time, by the end of 2023, inflation is projected to fall to 2.9%.
In addition, the draft budget assumes support for families with children, as many parents in the UK cannot return to their jobs because of skyrocketing childcare costs.
The Bank of England will meet next week, and investors are concerned about the outlook for the British regulator's monetary policy.
GBPUSD Technical Analysis
On the daily chart the Bollinger Band indicator has not chosen a definite direction and demonstrates flat dynamics.
The MACD histogram is near the zero line. The indicator does not show any signals
Stochastic Oscillator is declining and has already left the overbought area.
In case of a confident breakdown and consolidation of the price above 1.2100, we form long positions, aiming for 1.2176. Stop-loss is set at 1.2054.
Pair fixation below 1.2054 will tell about development of descending movement. The sellers' target is 1.1950. Stop-loss is set at 1.2100.