- Britain’s GDP shrank more than initially estimated in the third quarter.
- Economists predict that the economy will contract once more in the current quarter.
- The number of Americans submitting new claims for unemployment benefits increased less than anticipated.
Today’s GBP/USD outlook is bearish. Data released on Thursday revealed that Britain’s GDP shrank more than initially estimated in the third quarter of this year, placing it last among the Group of Seven major advanced countries ahead of what is expected to be a miserable 2023.
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According to the Office for National Statistics, economic output decreased by 0.3% quarterly compared to a previous estimate of -0.2%.
The ONS claimed that although the measurements were slightly biased to the downside by the one-time bank holiday for Queen Elizabeth’s burial, they showed that Britain had the lowest quarterly growth among the G7 countries.
In quarterly terms, business investment decreased by 2.5%, compared to the prior preliminary estimate of a 0.5% decline.
“The UK is expected to continue to do poorly in the future. Due to the strength of the headwinds from both monetary and fiscal policy, we anticipate that Britain will experience the deepest recession among major advanced countries in 2023, “Gabriella Dickens, an economist with Pantheon Macroeconomics, said.
Most economists surveyed by Reuters predict that the economy will contract once more in the current quarter, which some analysts characterize as a recession.
On Thursday, the US dollar gained ground over most of its major competitors as data from the country indicated that the labor market was strong, which might help the Federal Reserve maintain its hawkish stance.
While the economy recovered more quickly than anticipated in the third quarter, the number of Americans submitting new claims for unemployment benefits increased less than anticipated last week, indicating that the labor market is still tight.
GBP/USD key events today
Investors will watch data from the US, including core durable goods, core PCE price index, and new home sales.
GBP/USD technical outlook: Strong support at the 1.2000 psychological level
The GBP/USD collapse has paused at the 1.2000 key psychological level, and bulls have returned for a pullback. The trend remains bearish as the price is firmly below the 30-SMA with the RSI below 50.
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This pullback might retest the 1.2109 support-turned-resistance before the downtrend continues. When bears return, the price will likely take out the 1.2000 support level and make a new low.
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