Chart of the day - GBPUSD (22.03.2023)

British pound is the best performing G10 currency today as latest hot CPI data showed both headline and core inflation in the UK unexpectedly accelerated in February, while analysts expected easing of price pressures. Markets now fully price in a 25 bps rate hike by the BOE this week. Before today's data release, traders were betting fairly either on a halt in rate hikes or a 25 bps increase. Pair will have a chance to move in the evening during the highly anticipated FED decision and Powell press conference. The US central bank is expected to raise the fed funds rate by 25bps, however some believe that a pause of the tightening cycle is needed in order to shore up financial stability after  recent banking turmoil. 

From a technical point of view, GBPUSD pair climbed above major mid-term resistance at 1.2290, which is marked with previous price reactions. If current sentiment prevails, upward move may accelerate towards 1.2450, where highs from January 2023 are located. On the other hand, in case of more hawkish FED, another downward impulse towards local support at 1.2215 may be launched. This level also coincides with the lower limit of local ascending channel.

GBPUSD, H4 interval. Source: xStation5