GBP/USD Price Analysis: Eyes more gains above 1.2500 ahead of UK GDP and US PPI
- GBP/USD is expected to witness significant gains above 1.2500 as declining US inflation has weighed heavily on the US Dollar.
- The Pound Sterling is expected to show some action ahead of the release of the UK GDP and production-related (Feb) data.
- The impact of the weakness in US gasoline prices in March will be reflected in PPI figures.
The GBP/USD pair is gathering strength for recapturing the psychological resistance of 1.2500 in the Asian session. The Cable got significant bids on Wednesday after United States inflation softened as anticipated by the market participants.
The Pound Sterling is expected to show some action ahead of the release of the United Kingdom Gross Domestic Product (GDP) and production-related (Feb) data. Monthly GDP is expected to expand by 0.1% vs. the former expansion of 0.3%. Industrial and Manufacturing Production is likely to expand by 0.2% on a monthly basis.
Meanwhile, the US Dollar Index (DXY) seems vulnerable around 101.47 and is likely to witness more downside as the impact of weakness in gasoline prices in March will be reflected in Producer Price Index (PPI) figures. Monthly headline PPI is expected to remain stagnant against a deflation of 0.1%. Annual headline PPI would soften heavily to 3.0% from the prior release of 4.6%.
GBP/USD is marching towards the horizontal resistance placed from April 04 high at 1.2525 on an hourly scale. The Cable has got an adrenaline rush after a breakout of the Falling Channel chart pattern.
Upward-sloping 20-period Exponential Moving Average (EMA) at 1.2466 indicates more upside ahead.
An oscillation in the 60.00-80.00 range by the Relative Strength Index (RSI) (14) indicates that the bullish momentum is already active.
For further upside, the Cable needs to surpass the psychological resistance of 1.2500, which will drive the asset towards April 04 high at 1.2525. A breach of the latter would expose the Cable to a fresh nine-month high at 1.2597, which is 08 June 2022 high.
On the flip side, a break below the round-level support of 1.2400 will expose the asset to April 10 low at 1.2344 and March 30 low at 1.2294.
GBP/USD hourly chart
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
