GBP/USD catches a much-needed break, grasping at 1.22
- The GBP/USD caught some lift on Thursday, rising back to the 1.2200 handle.
- Friday sees UK GDP figures amidst a slew of low-tier data.
- The Pound Sterling is broadly expected to continue weakening looking out long-term.
The GBP/USD managed to eke out a minor recovery on Friday, owing more to a step back in the broad-market US Dollar Index (DXY) than any intrinsic strength to be found in the Pound Sterling (GBP).
Market analysts broadly expect the GBP to continue to weaken moving forward, and a continued backslide to the 1.2000 major handle is all but a foregone conclusion for many instutitions.
The upcoming Friday trading session will kick things off for the GBP/USD with UK Gross Domestic Product figures due at 06:00 GMT. The UK GDP for the second quarter is forecast to hold steady at 0.2%, and a miss for headline economic growth in the British economy is all set to see the Pound lose what little gains it's recovered for Thursday.
Friday also brings high-impact data for the USD, most notably the Personal Consumption Expenditure (PCE) Price Index at 12:30 GMT. The PCE numbers are expected to hold steady at 0.2% for the month of August, with the annualized figure for the same period seen ticking down from 4.2% to 3.9%.
US figures hit a middling note on Thursday, with US Initial Jobless Claims clocking in at 204K versus the previous 202K; US annualized GDP for the second quarter came in exactly at expectations at 2.1%.
The big miss for Thursday was US Pending Home Sales, which surprised to the downside by not-insignificant -7.1%, far below the forecast -0.8% and dropping away from the previous 0.9%.
Read More:
GBP/USD remains vulnerable to the 1.20/1.21 area – ING
The Pound and Euro should weaken substantially through early 2024 – Wells Fargo
GBP/USD needs to surpass 1.2350 to show more meaningful technical strength – Scotiabank
GBP/USD technical outlook
The GBP/USD rose half a percent on Thursday, lifting to a session high of 1.2220 after pinging into six-month lows at 1.2110 the previous day.
Hourly candles have the pair rising into technical support coming down from the bearish 200-hour Simple Moving Average (SMA) near 1.2260.
On daily candlesticks the GBP/USD is firmly bearish and potentially primed for a minor relief rally. Price action will be capped off by the 200-day SMA above 1.2400, and the 34-day Exponential Moving Average (EMA) is racing to make a bearish cross of the longer moving average.
the GBP/USD is over 7% off its last meaningful swing high in July at 1.3140.
GBP/USD hourly chart
GBP/USD daily chart
GBP/USD technical levels
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.
