- Sterling continues to hang on the downside, preliminary GDP on the docket for Friday.
- Bulls look hampered on the sidelines as the GBP/USD continues to sink to new lows.
The GBP/USD sees itself cycling near 1.3375 heading into Friday’s London markets after managing to pull back somewhat from a six-month low made earlier this week. The Sterling has been hammered by drooping economic figures that saw the Bank of England forced to walk back an expected rate hike in May, and today’s quarterly GDP figures will see traders hoping for some good news.
The mild economic contraction that was expected in the first quarter of 2018 is continuing to extend into 2018’s mid-point, and traders are hungry for some good news for a change. Friday’s preliminary GDP figures for the first quarter, which drop at 08:30 GMT, are expected to hold the line, and the year-on-year GDP numbers are forecast at 1.2%, in-line with the previous figure. Meanwhile, Total Business Investment for the first quarter is seen contracting slightly, from the previous period’s 0.3% to 0.2%.
Friday also sees a speech from the BoE’s Mark Carney, which starts at 13:20 GMT. Carney will be speaking at the Society of Professional Economists’ annual dinner in London, and traders are going to be listening in to try and filter out any tidbits about where the BoE could be heading looking forward.
Sentiment Extreme Drags GBP/USD Lower
GBP/USD levels to watch
The technical outlook for the Sterling remains on the bearish side, and as FXStreet’s own Valeria Bednarik noted, “in the meantime, the short-term picture remains unchanged, with the risk skewed to the downside, given that in the 4 hours chart, the price is unable to advance beyond its 20 SMA, now around 1.3400, while technical indicators hold within bearish territory, the Momentum heading south after failing to overcome its mid-line, and the RSI hovering below its daily high and currently at 45.”
Support levels: 1.3365 1.3330 1.3300
Resistance levels: 1.3420 1.3455 1.3490
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