UK GDP Mixed
The August rally in GBPUSD continues today despite some mixed results in the UK GDP data this morning. Monthly prelim GDP was seen at 0.3% up from -0.1% prior, and well above the 0.1% the market was looking for. Prelim quarterly GDP was also seen above forecasts at 0.3% vs 0.1% expected, though down against the prior 0.7% result. In all, the data has had a muted impact on GBP given the mixed results. However, on the back of a perceived hawkish shift at the last BOE meeting (BOE eased but warned that easing cycle was almost over), GBP has remained well bid and looks likely to continue higher near-term, particularly while USD remains weak.
US Data on Watch
Looking ahead, traders will now be watching the latest US PPI results later today. On the back of softer-than-forecast US CPI results earlier in the week, any further weakness today should keep USD pressured lower into next week, allowing GBPUSD to continue higher for now, putting focus back on YTD highs. We also have weekly US jobless claims. Given the heavy downward revision to the NFP results today’s data will be closely watched and any uptick should further reinforce dovish Fed expectations keeping USD sold into tomorrow’s retail sales and UoM data.
Technical Views
GBPUSD
The rally in GBPUSD has seen the market breaking out above the 1.3427 level and the bear trend line from YTD highs. Price is fast approaching a test of next resistance at the 1.3631 level and with momentum studies bullish, focus is on a breakout towards 1.3748 next. Outlook remains bullish while above 1.3427.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.