GBP/USD: outlook for March 20-24

GBP/USD surged to 1.2390. The Bank of England left rates on hold, but its member Kristin Forbes voted for a hike thereby showing that policymakers becoming more and more concerned with a rise in inflation. Her vote surprised the market and made the pound rise. Post-FOMC weakness of the US dollar was another tailwind for the British pound. On the political front, Theresa May has finally received a formal permission to trigger Article 50 by the end of March. Nicola Sturgeon’s bid to hold another referendum on the Scottish independence of the country was rejected by the UK Prime Minister who tries to avoid spreading the country’s resources between defending the British integrity and securing advantageous separation with the EU. This news offered additional support to the pound.

Next week keep an eye on the UK CPI figures and retail sales coming on Tuesday and Thursday respectively. From the US, we will be waiting for the comments on the US economic outlook from numerous FOMC members, Fed Chair Yellen’s speech scheduled for Thursday accompanied by the UK retail sales and the US unemployment claims, as well as the US core durable goods orders on Friday.

Technically, short-term indicators remain in neutral-bearish territory and might prompt a retracement towards immediate supports at 1.2350, 1.2290 (100-H4 MA) and 1.2210 (near 50-H4 MA). A break above resistance at 1.2430 (top of the daily Ichimoku Cloud, downtrend line) suggests a further uplift towards the resistances at 1.2480, 1.2500 and 1.2550.