Global macro overview for 10/03/2017:
Last Wednesday, the UK Finance Minister Philip Hammond presented his annual budget statement for the years 2017 - 2018. According to his projections, the previous UK economy expansion estimate of 1.4% expansion has been upgraded to 2.0%. Nevertheless, during the next year economic growth is expected to fall to 1.6% and then climb to 1.7% and 1.9% in 2019 and 2020, respectively. The return to 2.0% growth rate is expected in 2021. Moreover, the inflation expectation has been increased to the level of 2.4% in 2017, but then inflation is expected to decrease slightly to 2.3% in 2018. The Bank of England inflation target of 2.0% will be hit in 2019. In conclusion, a rather optimistic point of view from Hammond, that neglects all of the negative effects of a post-Brexit economy. The question remains, whether he took into account the possibility of success of the second Scottish referendum? Time will tell.
Let's now take a look at GBP/USD technical picture at the H4 time frame. The price is currently trading just above the 78%Fibo at the level of 1.2140 in heavily oversold market conditions. Moreover, it looks like the bull camp is trying to establish a base for a bounce towards the intraday resistance at the level of 1.2211 as the price had broken out of the dashed channel already. If the level of 1.2133 is not clearly violated, the immediate bias has changed to slightly bullish.
