GBP/USD recedes and consolidates around1.2230 on mixed UK data, strong US DollarGBP/USD finished the week on a lower note after it reached 1.234, the high of the week, but retreated as sentiment dampened. On Friday, the GBP/USD is trading at 1.2228, retracing 0.47% at the time of typing.The US equities market prepares to end the week in positive territory despite a renewed round of turbulence. Deutsche Bank stock fell sharply on fears that the German bank could default, as shown by the Credit Default Swaps (CDS) rising 220 basis points. Although it hurt Wall Street as the session opened, investors shrugged off those fears, as they speculated the Federal Reserve (Fed) would cut rates in 2023.Richmond Fed President Thomas Barkin commented that the situation in the banking sector “felt very stable by the time we got there (to the meeting). So the conditions were right to do monetary policy the way we want to do monetary policy.”
On the data front, the US economic calendar featured the S&P Global PMI improved in March, exceeding expectations and the prior’s month data. The Manufacturing Index stood in the contractionary territory. At the same time, Durable Good Orders plunged by 1% but improved compared to the last month’s reading.Given the backdrop, the GBP/USD extended its losses, boosted by a stronger US Dollar. Even though the GBP/USD hit a daily low at 1.2190, buyers could hurdle the 1.2200 mark. It should be said that failure to achieve a daily close above 1.2300 could exacerbate a fall below 1.2200, which could extend to the 20-day EMA around 1.2135. Once cleared, the 200-day EMA would be up for grabs. On the flip side, buyers reclaiming 1.2300 can pave the way to the weekly high of 1.2343.