- The UK financial system recorded no development within the third quarter.
- The pound rallied on Friday because the US greenback fell because of smooth inflation figures.
- US inflation rose by 0.1%, beneath estimates of 0.2%.
The GBP/USD outlook exhibits additional weak spot within the UK financial system after the Workplace for Nationwide Statistics downgraded its estimate for Q3 development. In the meantime, the US greenback remained weak after Friday’s inflation figures got here in softer than forecasts.
-Are you in search of the very best AI Trading Brokers? Test our detailed guide-
Knowledge on Monday revealed that the UK financial system recorded no development within the third quarter. This was a downgrade from the earlier studying of a 0.1% development. Consequently, the pound eased barely. Nonetheless, the Financial institution of England will doubtless stay cautious because of excessive inflation. A separate report on Friday confirmed that UK retail gross sales elevated by 0.2%, lacking forecasts of a 0.5% enhance.
In the meantime, the pound rallied on Friday because the US greenback fell because of smooth inflation figures. The US core PCE launched on Friday revealed that inflation rose by 0.1%, beneath estimates of a 0.2% enhance. This prompted the buck to retreat from its weekly highs, giving sterling some aid.
Nonetheless, the outlook for the pair stays bleak. Final week, the greenback soared after the FOMC assembly, the place policymakers lower charges however delivered a hawkish outlook for 2025. The central financial institution expects to decrease borrowing prices by 50-bps subsequent yr. This was a deep downgrade from September, when policymakers had been prepared to chop by 100-bps. Market members at the moment are ready to see whether or not Trump will go his coverage proposals after taking workplace in January.
GBP/USD key occasions at the moment
It will likely be a gradual vacation week for the pound. Subsequently, market members will proceed digesting final week’s occasions.
GBP/USD technical outlook: Rebound meets the 1.2601 resistance
On the technical facet, the GBP/USD worth has rebounded to retest the 1.2601 resistance degree. The downtrend paused when bears didn’t commerce beneath the 1.2500 assist degree. Nonetheless, regardless of the pause and pullback, the downtrend stays intact because the worth trades beneath the 30-SMA. On the identical time, the RSI suggests stable bearish momentum beneath 50.
–Are you curious about studying extra about Canadian forex brokers? Test our detailed guide-
Furthermore, bears have resurfaced on the 1.2601 resistance, able to resume the downtrend. If this occurs, they may goal for a brand new low beneath the 1.2500 assist. Then again, a break above the 1.2601 resistance and the 30-SMA will sign a probable bullish reversal.
Trying to commerce foreign exchange now? Make investments at eToro!
67% of retail investor accounts lose cash when buying and selling CFDs with this supplier. You need to think about whether or not you’ll be able to afford to take the excessive danger of dropping your cash.
