GBP/USD: GBP to USD in Tight Range After Disappointing Data Dump
The GBP to USD (GBP/USD) is little changed today as the market reflects on the disappointing economic data from the United Kingdom. The pair is trading at 1.2943, which is a few pips below the intraday high of 1.2956.
In an early morning data dump, the Office of National Statistics (ONS) showed that all is not well in the United Kingdom. The data showed that the country’s economy grew by 2.1% in August, lower than the 6.4% increase in the previous month. Over the past three months to August, the economy grew by 8.0%.
Meanwhile, other data showed that construction output grew by 3.0%, which was lower than the expected 5% and the previous month’s growth of 17.6%. In all, the output has dropped by 13% on a year-on-year basis.
Industrial production, which measures the performance of several industries, increased by just 0.3% in August after rising by 5.2% in July. The production fell by 6.4% YoY.
The GBP to USD also reacted to weak manufacturing production data. The data showed that the production rose by 0.7% and fell by 8.4% on a YoY basis.
These numbers show that the UK economy is not out of the woods yet. Indeed, analysts expect that it will get worse once government support ends.
GBP to USD technical outlook
The GBP to USD price has been in a tight range in recent days. The price has remained between the resistance of 1.2970 and the support of 1.2847. As a result, the average true range, which is a measure of volatility has dropped substantially. The moving averages remain above the 25-day and 15-day exponential moving averages.
Therefore, as I wrote in the EUR to USD update, this pair is likely to remain in the current narrow range. However, because it is Friday, there is a possibility we will receive important updates on Brexit. If it happens, the GBP/USD price could move above or below the range.