UK GDP Contracts
The rally in GBPUSD has stalled for now ahead of the 1.30 level as weaker-than-forecast UK economic data hit the wires this morning. Monthly UK GDP was seen contracting 0.1% last month, down from 0.4% prior, below the 0.1% rise the market was looking for. The data has clearly caught traders off guard with GBP reversing lower through early European trading as a result. Looking at the breakdown of the data, production saw the largest negative contribution, falling 0.9% in stark contrast to the 0,5% rise seen over the prior month.
BOE in Focus
The Pound has risen sharply over recent weeks amidst the downturn in USD. A dovish repricing of the Fed outlook has seen the Dollar tanking, allowing for a widespread rebound in FX markets. While the BOE is expected to keep rates on hold next week, there is still some uncertainty ahead of the meeting meaning that the market could be caught off-guard by a fresh rate-cut or a dovish message from the bank. This latest data, along with fears over potential tariff risks, mean that the UK economy is still at risk and at the very least, the BOE will likely keep the door open to further easing in its messaging next week which could fuel further corrective action in GBPUSD.
Technical Views
GBPUSD
The breakout in GBPSUD above the 1.2685 level has stalled for now ahead of the 1.3017 level. However, with price now back above the broken bull trend line, and with momentum studies bullish, the focus is on a further push higher while price holds above the 1.2685 level.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.