Jump to content

GBP/USD Forecast: UK Growth Slowing, GBP Risks Remain Lower


Recommended Posts

GBP/USD PRICE ANALYSIS & NEWS

  • UK GDP Contracts In March
  • GBP/USD Risks Remain Lower

Forex - GBP/USD hits 2-month high as dollar comes under pressure By  Investing.com

UK Q1 GDP RECAP

UK GDP Q4 Q/Q: 0.8% vs Exp. 1.0% (Prior 1.0%) Mar M/M: -0.1% vs Exp. 0.0% (Prior 0.1%)

UK GDP for the first quarter came in below expectations across the board, with the quarterly figure rising 0.8% (Exp. 1.0%). While the March reading showed a surprise contraction of 0.1%. Given last week’s Bank of England monetary policy report, this further compounds their view that growth will materially slow down throughout the year, highlighting the stagflation risks that the UK economy is facing. What’s more, with the cost of living squeeze now more prominent, growth will take a bigger hit in Q2. In reaction to the data, the Pound saw a marginal drop, dipping below the 1.2200 handle before quickly retracing. However, with risk appetite remaining sour, the path of least resistance is lower GBP.

On the technical front, there is little in the way of support until 1.2073 (May 2020) with the 1.2000 handle below. Meanwhile, resistance resides at 1.2400. The bias remains to fade on rallies for GBP/USD. Elsewhere, upside risks remain for EUR/GBP as ECB Officials talk up the potential for a July rate rise. As well as the fact that the Pound has a higher beta to equity markets, making the currency more vulnerable when equities sell-off.

GBP/USD CHART: DAILY TIME FRAME

GBPUSD daily chart

Source: Refinitiv

 

May 12, 2022 | DailyFX
Justin McQueen, Strategist

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,105
    • Total Posts
      85,945
    • Total Members
      68,306
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Vayor
    Joined 07/07/22 04:39
  • Posts

    • While the Fed minutes last night stressed that more rate hikes would be needed, signs of weakness in commodity prices have given markets hope that perhaps the worst of the inflation surge is now behind us. Markets can, perhaps, cope with rate rises as long as the outlook further down the road is looking brighter. Asian indices made headway, taking their cue from the recovery in the US yesterday after a shaky couple of days. In the UK the political drama drags on, with no sign that the Prime Minister intends to resign yet even as resignations continue to flow from his cabinet and the wider government payroll. Investors now begin to turn their attention towards Friday's payroll figures, the main event of the week.   
    • For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK. Today’s coverage:   Indices: Mostly higher, Europe expected up at the start… all this despite FOMC minutes and IMF highlighting the need for higher rates FX: USD remains strong after the FOMC minutes indicated more big rise in US rates to come.  AUDUSD climbs after expanded Aussie trade surplus   Equities: Earnings PSN CURY JDW. Watching  IAG as BA cancels a further 10,300 flights this summer Commods: Oil up after 3mth lows. Gold 10mth lows. Coffee Robusta 11mth lows      
    • DAX 40, FTSE 100, STOXX 50, Dollar Index DXY, EURUSD - Elliott Wave Trading Strategies DAX 40 Indizes Technische Analyse de, FTSE 100 Index UKX, STOXX 50 Forex EURUSD DXY Dollar Index Elliott Wave  Technical Analysis European Stock Market Daily News Headlines:European markets closed sharply higher today with shares in France leading Elliott Wave Market Indices Summary: The eurusd and dax40 should rally in the next session and then turn lower Trading Strategy:Looking to short Wave c) of (4) in the corrective rally Video Chapters 00:00 DAX 40 (GDAXI)  04:27 EURO STOXX 50 05:16 UKX / FTSE 100  05:43 Forex EURUSD / DXY 14:14 Thanks for watching!  Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge.com      
×
×
  • Create New...