GBP/USD skids below 1.1150 despite upbeat UK GDP data


  • GBP/USD has not displayed a sheer response to the upbeat UK GDP data.
  • The UK economy has delivered a growth rate of 0.2% and 4.4% on a monthly and annual basis.
  • The DXY has surrendered the critical support of 112.00 amid improved risk appetite.

The GBP/USD pair has slipped below the immediate support of 1.1150 despite upbeat UK Gross Domestic Product (GDP) data. The UK National Statistics has reported the economic activities in the UK economy have grown by 0.2% against the expectation of a decline of 0.1% on a quarterly basis. Also, the annual data has improved dramatically to 4.4% vs. the projections and the prior release of 2.9%.

The cable is auctioning in a positive trajectory despite a surprise announcement of the bond-purchase program by the Bank of England (BOE). A 13-day bond-buying program has been announced in which the BOE will purchase GBP 5 billion worth of long-dated bonds each day. At times, when the BOE is dedicated to bringing price stability, liquidity infusion could offset the impact of accelerating interest rates to some extent.

The US dollar index (DXY) witnessed a steep fall this week after soaring expectations of a slowdown in the current pace of hiking interest rates sooner. It is worth noting that Fed’s interest rate peak is not far from current interest rates at 3.-3.325% after a scrutiny of the ongoing velocity of hiking interest rates. The Fed is expected to maintain the terminal rate at 4.6% for a longer period as discussed in the reported economic projections till it find a slowdown in the price pressures for several months.

In September, the market reaction towards the higher-than-expected headline Consumer Price Index (CPI) and core CPI, despite falling gasoline prices, was extremely risk-averse. In retaliation to that, the Fed has announced a rate hike by 75 basis points (bps). Therefore, the impact of Friday’s US Personal Consumption Expenditure (PCE) is expected to remain muted. As per the consensus, the core PCE index is seen 10 bps higher at 4.7% than the prior release.

GBP/USD

Overview
Today last price 1.1142
Today Daily Change 0.0023
Today Daily Change % 0.21
Today daily open 1.1119
 
Trends
Daily SMA20 1.132
Daily SMA50 1.1719
Daily SMA100 1.1989
Daily SMA200 1.2605
 
Levels
Previous Daily High 1.1122
Previous Daily Low 1.0762
Previous Weekly High 1.1461
Previous Weekly Low 1.084
Previous Monthly High 1.2294
Previous Monthly Low 1.1599
Daily Fibonacci 38.2% 1.0984
Daily Fibonacci 61.8% 1.09
Daily Pivot Point S1 1.088
Daily Pivot Point S2 1.0642
Daily Pivot Point S3 1.0521
Daily Pivot Point R1 1.1239
Daily Pivot Point R2 1.136
Daily Pivot Point R3 1.1598

 

 

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