GBP Sterling - Sterling holds on to 1.25 mark, technicals consolidate gains

Megan Greene, a member of the Bank of England's Monetary Policy Committee (MPC), said she wanted more evidence that inflationary pressures were easing before voting for a rate cut, after giving up her call for a rate hike earlier this month. Separately, data released on Thursday showed that the preliminary UK Composite Purchasing Managers Index (PMI) rose to 53.3 in February from 52.9 in January, the highest level in nine months, further suggesting that the UK's shallow recession last year may be short-lived. The initial value of the UK's service industry PMI in February remained unchanged at 54.3, and the initial value of the manufacturing PMI was still below the 50 dividing line between good and weak, but rose slightly to 47.1 from 47.0 in January.

The pound continues to stabilize against the US dollar and has risen to the 1.27 mark on Thursday. The two previous lows during the month held the key support of 1.25 mark. Note that this area is also the 250-day moving average; and the chart can be seen in the RSI and stochastic index. It has rebounded again, and the MACD indicator has just broken above the signal line. It is expected that the pound will have room to rebound in the short term. The current resistance levels are expected to be 1.27 and 1.2780, and the next level is expected to be 1.2830 and 1.30. The support level looks back at the 250-day moving average of 1.2530 and the 1.25 level. It should be noted that if the market outlook clearly falls below this area, the pound may usher in a larger decline. According to the golden ratio calculation, the 50% and 61.8% adjustment ranges are 1.2430 and 1.2340 levels.

Forecast range:
Resistance 1.2650 - 1.2780 - 1.2830 - 1.3000**
Supports 1.2500/30 – 1.2430 – 1.2340

Highlights of the week:
Bank of England President Bailey: Market bets on interest rate cuts are not unreasonable, but the economy is picking up
Swati Dhingra, MPC member of the Bank of England: The British economy faces great downside risks, and tightening monetary policy will intensify the risks
Bank of England deputy governor Broadbent: I don’t think all the evidence points to a rate cut

UK public sector surplus in January was £23.344 billion
UK public sector net borrowing excluding state-owned banks was -16.691 billion pounds in January
UK public sector net borrowing in January was -17.615 billion pounds

The initial value of the UK's comprehensive PMI in February was 53.3, and the initial value of the manufacturing PMI was 47.1

Bank of England MPC member Green said he wanted to see more evidence of slowing inflation before voting for a rate cut.

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