GBP/USD Forecast: UK data hits the Pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2550

UK monthly GDP came in at 1.8% in May, declined by 21.2% in the 3-month to June according to NIESR.
Chancellor of the Exchequer Sunak said that data “underline the scale of the challenge.”
GBP/USD is technically bearish, dollar’s weakness limits the decline.

The British Pound was once again the weakest dollar’s rival. GBP/USD traded as low as 1.2479, a one-week low, on the back of UK GDP, which was up by 1.8% MoM in May, below the 5% expected. The number suggests that the economic comeback will be long and painful. The NIESR GDP estimate for the three months to June came in at -21.2%, worse than anticipated, and after printing at -19.1% in the previous month.

Even further, Chancellor of the Exchequer, Rishi Sunak, said: “Today’s figures underline the scale of the challenge we face,” focusing then on the need to protect, support, and create jobs. The country also published its Total Trade Balance, which posted a surplus of £4.3 B in May, after printing at £2.3 B in April, and Industrial Production for the same month, which was up by 6.0% MoM after falling by 20.2% in April. The pair recovered from the mentioned low on the back of dollar’s broad weakness during US trading hours, unable, however, to turn positive for the day. The UK will publish June inflation figures this Wednesday.

GBP/USD short-term technical outlook

The GBP/USD pair is offering a neutral-to-bearish stance, with the downside limited by the dollar’s weakness. In the 4-hour chart, the pair bounced from a mildly bullish 100 SMA but remains below a bearish 20 SMA. Technical indicators, in the meantime, lack directional strength within negative levels. Should the pair resume its decline below 1.2520, the most likely scenario is an approach to the 1.2400 price zone.

Support levels: 1.2520 1.2470 1.2420

Resistance levels: 1.2585 1.2635 1.2680

View Live Chart for the GBP/USD

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.