GBP/USD back below 1.31 ahead of the UK's GDP reading

The Sterling heads into Friday on softer footing following the Greenback's rebound.
Brexit headlines could overshadow the UK's GDP reading due early Friday.

Joshua Gibson FXStreet

The GBP/USD is trading into 1.3080 ahead of Friday's London market session after Thursday's slide from 1.3180 as the Greenback climbed across the board.

Friday brings the UK's GDP reading at 08:30 GMT, and the annualized GDP for 2018's second quarter is expected to hold steady at 1.3%, while the q/q number is likewise expected to hold at 0.4%; Total Business investment within the UK is also forecast to remain at current rates, with the q/q reading expected to come in at 0.5% and the annualized Total Business Investment forecast at 0.8%. A bad reading could see the Sterling continuing to slide to cap the day off, though Brexit headlines will likely continue to drive sentiment for Pound traders.

Negotiations on Brexit aren't going nearly as swimmingly as many people were expecting only a few weeks ago, and UK Prime Minister Theresa May is continuing to struggle to find workable middle ground with European Union leaders in Brussels. On the homefront, Eurosceptic leavers within PM May's own ruling party are promising to vote down any agreement PM May manages to scrape together with EU leaders, while indications are suggesting that a majority of Britons would now prefer to remain within the Eurozone, and the EU's lead Brexit negotiator Michel Barnier stating that he's working on a new deal, but details continue to be light.

GBP/USD levels to watch

The Sterling is edging away from September's high, and as noted by FXStreet's own Valeria Bednarik: "the GBP/USD pair retreated sharply after failing to regain ground beyond 1.3170, a major Fibonacci resistance, and now trades below its 20 SMA, which lost its upward strength. Furthermore, technical indicators have entered negative territory, heading into the Asian session with strong downward slopes, anticipating some additional declines ahead, particularly on a break below 1.3055, the low established last Friday, with scope then to extend its decline to 1.2970, should dollar's strength persists."

Support levels: 1.3090 1.3055 1.3010

Resistance levels: 1.3130 1.3165 1.3200

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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