GBP/USD Forecast: Looks set to decline further, focus shifts to the key US GDP report

The US Dollar added to its recent uptrend, rising to the highest level in near two years, and kept exerting some downward pressure on the GBP/USD pair. As global central banks turn more cautious/dovish, the fact that the Fed has just paused its tightening cycle and is yet to reverse its course, amid the incoming positive US economic data, has been fueling the ongoing USD rally. The latest positive surprise came from US durable goods order data, which came in to show a sharp rebound and surpassed even the most optimistic estimates.

The pair dropped to an intraday low level of 1.2866 - the lowest level since mid-Feb., and was further weighed down by the lack of progress in the UK cross-party talks to break the Brexit deadlock. The greenback, however, started losing positive momentum during the US trading session and assisted the pair to bounce off daily lows. The pair finally settled near the 1.2900 handle and was seen oscillating in a narrow trading band through the Asian session on Friday. 

Today's key focus will be on the advance US Q1 GDP report, expected to show that the US economy expanded at an annualized pace of 2.1% during the reported period as against the previous quarter's final reading of 2.2%. There are chances that the forecast might have been upgraded in wake of the recent upbeat US macro data and a higher than expected reading should force investors to start pricing in a hawkish shift in the FOMC's outlook when it announces its latest monetary policy update next Wednesday.

From a technical perspective, the pair has already confirmed a near-term bearish break below the very important 200-day SMA and a descending triangle pattern. Hence, the risk remains skewed to the downside and the downward trajectory now seems to drag the pair towards the immediate support near the 1.2830 region. A follow-through selling has the potential to drag the pair further towards its next major support near the 1.2775 area, marking 61.8% Fibonacci retracement level of the 1.2396-1.3381 up-move.

On the flip side, any attempted bounce might now confront some fresh supply near the mentioned support break-point, now turned resistance around the 1.2965-70 region. A follow-through uptick could get extended beyond the key 1.30 psychological mark but seems more likely to fizzle out near a descending trend-line resistance (a part of the descending triangular formation), currently near the 1.3020 region.