GBP/USD: Carney's speech awaited after UK GDP miss

Pound trades around 1.2860 during early Tuesday.
The pair dropped after fourth-quarter GDP missed estimates the previous day.
BoE Governor Mark Carney’s speech and Brexit developments can provide fresh directives to traders.

Anil Panchal FXStreet

The GBP/USD pair trades better bid near 1.2860 while heading towards European session on Tuesday. The pair dropped yesterday after the fourth-quarter 2018 GDP growth lagged behind market consensus of 0.3% to 0.2%. Investors now await Bank of England (BoE) Governor Mark Carney’s comments for the fresh impulse. Also in the watch list will be, the developments on the Brexit front.

GBP/USD closed at the lowest levels since early January on the UK data miss yesterday but recovered some of the losses around initial Tuesday. BoE’s Carney is scheduled to deliver a speech relating to “the latest developments in the global economy and risks to the outlook” in London around 13:00 GMT today.

The Governor is up for a speech after the British GDP rose the smallest in 2018 since the year before he took over as the BoE Chief in 2013. The UK economy is already finding it hard to confront the Brexit problems and the central bank has recently cut down growth forecast to the lowest in a decade during its last week's monetary policy meeting.

On the Brexit update, the latest Sky News report cited that the UK PM Theresa May discussed changes to the key blocks in the Brexit negotiations with the former European Council President Herman van Rompuy. On a separate note, the Sun reported that the cabinet ministers are expecting Theresa May is preparing to resign as the PM in the UK summer. It should also be noted that EU & UK leaders are presently struggling to overcome Irish backstop, which if solved can re-open the Brexit negotiation for the British PM.

Given the present downturn in the UK data, the BoE Governor might not refrain from conveying economic weakness and Brexit uncertainty, as he did recently. Though, the positive signals could have a higher upside impact on the British Pound (GBP).

GBP/USD Technical Analysis

Considering GBP/USD’s sustained observance to immediate descending trend-line, at 1.2920 now, sellers are likely in control of the price movement. Should the pair clear 1.2920 resistance, 1.2980 and 1.3000 may gain buyers’ attention.

Meanwhile, 1.2830 and 1.2800 seem adjacent supports for the pair during further declines. However, additional downside past-1.2800 can recall 1.2725 and 1.2700 rest-points.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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