GBP/USD cycling 1.2750, Friday brings UK GDP, US CPI
- Sterling markets are hung in the middle as Brexit weighs, but Friday offers plenty of moving data.
- Investors are getting exhausted by the Brexit cycle, and the US Dollar's weakness sees the Cable unable to gain on weakness.
It's been a struggling week for GBP/USD, rotating around the 1.2750 level as Brexit anxiety in the run-up to January 15th's parliamentary vote ruins any opportunity for Cable bidders to capitalize on broad-market USD weakness, leaving the pair strung out in the middle, though buyers have managed to push the pair up a scant 0.34% from the week's open.
The UK's House of Commons is set to vote on Prime Minister Theresa May's Brexit withdrawal agreement next Tuesday, and with the plan looking set to fail by a wide margin at the hands of MPs, PM May's team will have just three days to scrape together an alternative plan or possibly face a parliamentary no-confidence vote in May's government. With no new Brexit news on the horizon, though, investors are heading into a densely-packed Friday session with UK and US data on the offering to take their minds off of the UK's increasingly-likely hard exit.
09:30 GMT sees a wave of UK data dropping on markets, with Manufacturing Production for November (forecast 0.3%, last -0.9%), November's Industrial Production (forecast 0.2%, last -0.6%) as markets expect a mild recovery in UK production figures; at the same time, the UK's Goods Trade Balance for November (forecast -£11.4 billion, last -£11.87 billion), while the key headline reading will be the UK's latest monthly GDP for November, expected to hold steady at 0.1%.
On the US side, the number worth noting will be Consumer Price Index (excluding Food and Energy) for the yearly period into December, with markets calling for a steady reading at 2.2%, and traders will be keeping a close eye on the key inflation reading, with the US Federal Reserve looking exceptionally exposed to weakening data, which could knock the US central bank off of rate hikes scheduled for 2019.
GBP/USD Levels to watch
The Sterling-Dollar pairing is still stuck in the middle as investors await next week's Brexit vote, as noted by FXStreet's own Valeria Bednarik:
The pair turned neutral in the short-term, as the 4 hours chart shows that technical indicators lack directional strength, stuck around their midlines, while the price is battling and also directionless 20 SMA. The 200 EMA continues providing an intraday support at around 1.2720, with scope for deeper slides on a break below it. Selling interest will also seize their chances on attempts to advance beyond the 1.2800 figure.
Support levels: 1.2720 1.2680 1.2640
Resistance levels: 1.2780 1.2815 1.2850
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.
