GBP/USD: Rally stalls ahead of the UK GDP release
|- The GBP/USD rally seems to have stalled amid broad-based USD rally.
- All eyes on the UK GDP, scheduled for release at 08:30 GMT.
The cable's retreat from 1.4244 (March 27 high) to 1.4060 (Asian session low) suggests the rally from the March 1 low of 1.3712 may have run out of steam.
The decline could be associated with the broad-based USD rally, possibly fuelled by quarter end flows, rising USD borrowing costs (as represented by Libor-OIS spread), and an upward revision of the US Q4 GDP.
Meanwhile, GBP positive news has been largely ignored:
- UK's Thornberry said the Labor party will likely vote for the final Brexit deal, thus ensuring a smooth exit from the EU
- Gfk UK consumer confidence rose to a 10-month high of -7 from -10 in February.
That said, the GBP/USD may regain bid tone if the UK Q4 GDP, due at 08:30 GMT, is revised upwards and is accompanied by an upbeat service sector performance. Also, US personal spending report scheduled for release in the US session could influence the GBP/USD pair.
GBP/USD Technical Levels
Currently, the spot is trading at 1.4077. A break above 1.4102 (hourly 200-MA) would mean the pullback from the recent high of 1.4245 has ended and could yield re-test of 1.4156 (100-hour MA) 1.42 (resistance as per the hourly chart).
Meanwhile, on the downside, acceptance below 1.4066 (March 27 low) would shift attention to the 1.3976 (ascending 21-day MA). A close lower would crowd out bulls trapper on the wrong side of the market, thus leading to a deeper sell-off to 1.3712 (March 1 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.