GBP/USD outlook: Cable eases after mixed UK data, but larger bulls are still intact

GBP/USD

Cable eases from new 2-month high in early European trading on Friday, as markets digest mixed data.

UK Q4 GDP ticked above expectations, signaling that the economy started to gain traction after contracting in in the third quarter and current account gap narrowed significantly, but house price index came well below expectations, partially offsetting positive impact.

Markets shift focus towards EU and US inflation figures, another key events today, the last day of the first quarter of 2023, which would add to expected increased volatility.

The GBPUSD probed above 1.2400 mark for the first time since early February, but gains were so far short-lived, putting temporarily aside expectations for final push towards ley barriers at 1.2447 (tops of Dec 14 / Jan 23).

Overall bullish picture on daily chart suggests shallow correction before bulls regain traction, with solid supports at 1.2300 zone (rising 10DMA/broken Fibo 76.4% of 1.2447/1.1802) to ideally contain however, stochastic is reversing from overbought territory and sharp loss of bullish momentum warn of possible deeper pullback.

Broken Fibo 61.8% level and a higher base at 1.2200 zone should hold extended dips to mark pullback as healthy correction and keep larger bulls in play.

Res: 1.2402; 1.2422; 1.2447; 1.2500.
Sup: 1.2337; 1.2300; 1.2219; 1.2190.

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