- GBP/USD steady on Friday, holding above 1.3000.
- Cable consolidates weekly losses and heads for a close under the 20-week moving average.
The pound is rising modestly against the US dollar on Friday, but still remains under pressure with a bearish bias. Volatility remains low on the last day of the week, as market stabilizes after a slide in equity prices and a rally of the US dollar.
The GBP/USD pair peaked after the beginning of the US session at 1.3060, hitting a fresh daily high and then pulled back modestly, finding support above 1.3030 (20-hour moving average). The recovery was limited and cable is consolidating the losses of the previous two days when tumbled from 1.3180 to near 1.3000 amid a rally of the US dollar.
The reversal pushed GBP/USD back below 1.3080 and close to the 1.3000, changing the short-term. It dropped back under the 20-week moving average. The pound needs a close above 1.3200 to open the doors to more gains.
Despite the lack of agreement regarding Brexit, the pound remained steady against it other rivals, showing only minor weekly losses against the Euro. It lost ground versus the yen that rose supported by risk aversion.
Week ahead: US GDP and Brexit
Next week, in the UK, “we do not have any important data releases next week. After the Brexit negotiations ended this week without a deal, we expect to have to wait to December (or even early January) to get one. Our base case is still a decent Brexit, where the UK leaves on orderly terms”, wrote analysts at Danske Bank.
Regarding the US, the key number will be released on Friday, with the first estimate of GDP growth in Q3. Danske analysts point out that Atlanta Fed’s GDPNow says it was 3.9% q/q AR, while the NY Fed Nowcast indicator says it was just 2.2% q/q AR. “We are believe it was probably
slightly higher than 3.0% q/q AR, which is relatively strong, at least in this expansion.”
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