- GBP/USD has been moving sideways above 1.2100 following Wednesday's decline.
- The UK economy grew at a softer pace than expected in Q3.
- Technical picture suggests that buyers remain on the sidelines.
GBP/USD has managed to stage a rebound early Thursday before going into a consolidation phase slightly above 1.2100. The pair's technical outlook shows that buyers remain uninterested and the US Dollar's market valuation is likely to drive the action in the second half of the day.
Earlier in the day, the data published by the UK's Office for National Statistics (ONS) revealed that the Gross Domestic Product (GDP) contracted by 0.3% on a quarterly basis in the third quarter. At an annualized rate, the UK economy grew by 1.9% in Q3, missing the market expectation of 2.4% by a wide margin. These figures weighed modestly on the Pound Sterling but GBP/USD didn't have a hard time holding above 1.2100.
The US economic docket will feature the third-quarter GDP. Since this data will be a revision and is expected to match the previous estimate of 2.9%, it is unlikely to trigger a significant market reaction.
The US Department of Labor will publish the weekly Initial Jobless Claims data as well but the trading action should remain subdued ahead of the Christmas holiday.
Market participants will keep a close eye on US stocks in the American session. Wall Street's three main indexes gained more than 1% on Wednesday and the US Dollar could come under selling pressure if the risk rally picks up steam later in the day.
GBP/USD Technical Analysis
GBP/USD trades slightly below the 20-period Simple Moving Average (SMA) on the four-hour chart and the Relative Strength Index (RSI) indicator stays below 50, suggesting that sellers remain in control of the pair's action.
On the downside, sellers could take action and open the door for an extended slide toward 1.2040 (200-period SMA) and 1.2000 (psychological level) in case 1.2100 (Fibonacci 23.6% retracement of the latest uptrend) is confirmed as resistance.
1.2150 (20-period SMA) aligns as initial resistance before 1.2200 (100-period SMA, 50-period SMA) and 1.2300 (psychological level, static level).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD rises to daily tops past 1.0800 post-NFP
The selling bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in April, lifting EUR/USD to the area of fresh peaks above 1.0800.
GBP/USD surpasses 1.2600 after disheartening US Payrolls
The resumption of the downward pressure in the US Dollar motivates GBP/USD to extend its earlier advance to the area beyond 1.2600 the figure in the wake of the release of US NFP.
Gold climbs to new highs above $2,300 on poor NFP prints
The precious metal maintains its bullish stance and breaks above the $2,300 barrier on Friday after US Nonfarm Payrolls showed the economy added fewer jobs than expected during last month.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.