GBP/USD Forecast: Mixed UK data leave investors clueless

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3857

The UK economy grew 4.8% as expected in the second quarter of the year.
US Initial Jobless Claims are expected to have contracted to 375K last week.
GBP/USD is technically neutral, could turn bearish on a break below 1.3790.

The GBP/USD pair trades around 1.3860, little affected by mixed UK data, as speculative interest keeps focusing on US developments. The kingdom published the preliminary estimate of its Q2 Gross Domestic Product, which printed as expected 4.8%, improving from -1.6% in the previous quarter. Industrial Production was up 8.3% YoY in June while Manufacturing Production was up 13.9% in the same period. The Goods Trade Balance posted a deficit of £-11.988 billion, more than doubling the previous figure and worse than anticipated.

In the US, inflation remains in the spotlight. The core annual Consumer Price Index was downwardly revised to 4.3% in July, giving some signs of peaking and reinforcing the patient Federal Reserve’s stance. During the upcoming American session, the country will publish the July Producer Price Index, foreseen steady at 7.3% YoY, and Initial Jobless Claims for the week ended August 6, foreseen at 375K.

GBP/USD short-term technical outlook

The GBP/USD pair has been confined to a tight 30 pips so far today, neutral in the near-term. The 4-hour chart shows that it stands a few pips above congesting moving averages, which lack directional strength. At the same time, technical indicators are stuck around their midlines, heading mildly lower, although failing to provide directional hints. The pair could turn bearish once below 1.3790, a strong static support level, while approaches to the 1.3900 area will likely attract sellers.

Support levels: 1.3845 1.3790 1.3755

Resistance levels: 1.3910 1.3960 1.4000

View Live Chart for the GBP/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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