GBP/USD Daily Forecast – Sterling Falls Below 1.3000 as UK GDP Falls Short

UK GDP fell 0.3% in November, weighing on the British Pound which is trading below 1.3000 against the dollar.
Jignesh Davda
GBP/USD

UK GDP Fell 0.3% in November

The Office for National Statistics reported a fall of 0.3% in GDP for November, falling short of the analyst forecast for an unchanged reading. On a three-month rolling basis, GDP grew by only 0.1%, marking a second consecutive month of slowing.

GBP/USD had dropped about half a percent and was active among the major ahead of the report. This suggests market participants may have anticipated a weak report, causing the drop below 1.3000 ahead of it.

The pair had decline roughly half a percent ahead of the report and last traded for a loss of about 0.7%.

GBP/USD has been declining for a number of factors and a recovery in the dollar is one of them. Last week, the trade-weighted dollar index (DXY) broke higher from a range that had contained it for nearly two weeks.

The index eased back following Friday’s US jobs report but is seen once again approaching fresh highs for the month.

Friday’s NFP figures showed the headline increase and average hourly earnings short of analyst expectations in December. However, the unemployment rate held steady at 3.5%.

The remainder of the trading session does not have any market-moving data releases scheduled for the pair. This could lead to a slowing of volatility for GBP/USD.

Technical Analysis

GBP/USD has been trading within a downward trend channel since turning lower once again last week. The pair gapped below support at 1.3050 at the open and has extended losses since.

GBPUSD Hourly Chart

A major horizontal level at 1.2989 has broken. With further support at 1.3000, this is considered to be a major area for the currency pair. It may be too early to tell if the bearish break will be sustained.

Resistance to the upside for the session ahead is seen near Thursday’s lows, roughly 1.3015. Further resistance comes in at 1.3050.

The next downside target for the pair comes in at 1.2915 which is a level that has been well respected on a daily and weekly chart.

Bottom Line

  • GBP/USD has broken below 1.3000 although volatility may slow from here with no further data releases for the day.
  • The pair trades in a clear downtrend. Rallies towards 1.3015 are likely to be met with sellers.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US