GBP/USD is up for the second straight day, approaching 1.25. No major economic data was released in the UK today, and no speakers are expected from the Bank of England. Therefore, the focus should be on the US Dollar and US GDP numbers.
In recent sessions, the US dollar has been under pressure on fears of a US recession. While US durable goods orders increased, the underlying trend pointed to weaker demand for US-made products, suggesting a weaker manufacturing sector. Earlier this week, USD consumer confidence declined to its lowest level in nine months.
Attention now turns to US GDP data for further clues of a possible slowdown in the world’s largest economy. GDP is expected to grow by 2% q/q, a decrease from 2.4%. Weak growth can fuel fears of a slowdown.
The data arrives ahead of tomorrow’s PCE core inflation data and next week’s FOMC interest rate decision.
GBP/USD Forecast
GBP/USD has recovered from uptrend line support at 1.24 and is back above the 20-moving average. This recovery and an RSI above 50 give buyers hope for gains. Buyers will try to rally above 1.2515, yesterday’s high, to attack 1.2545, the high of 2023, signaling a breakout. Ahead of here, 1.26 comes into action.
Conversely, sellers can expect a drop below 1.24 yesterday’s low and 1.2385 weekly low, negating the short-term uptrend and opening the door to a 1.2275 April low.
FTSE Technical Analysis
The FTSE is expected to open lower on gains as traders review the latest data from Barclays. The bank reported a 27% increase in profit as higher interest rates offset weakness in its investment banking arm.
Net profit increased to €1.8 billion from €1.4 billion in the same period in 2022, defeating forecasts by around €400 million. Meanwhile, revenue rose 11% to €7.2 billion, beating forecasts of €6.8 billion.
FTSE Forecast
Sellers will look for a move below 7818 to create lower lows and expose 20 SMAs at 7795 and 7700 in late January and 100 SMAs.
On the other hand, a rise in the 20-moving average above the 50-moving average and the RSI above 50 might encourage buyers. A break of the downtrend line at 7860 could signal a breakout and lead to a 7940 April high.
