GBPUSD slipped further down in the European trading session on Wednesday, continuing its downtrend stretching back to March 11th. The cable traded at 1.2624, after losing 0.04% courtesy of US Durable Goods Orders data. The pound sterling has erased all the gains it made during its 10-day winning streak against the dollar, but there’s little volatility expected on Wednesday, with no high-impact data in the barrel.
The US Durable Goods Orders came in at a higher-than-expected 1.4% growth in February, beating the consensus forecast of 1.2%. This resulted in headwinds for the GBPUSD currency pair. However, the downside was limited by the Consumer Confidence reading. The Conference Board-issued Consumer Confidence reading for March came in at 104.7, a decline from February’s 104.8, and below the forecast 106.9.
Meanwhile, yields on US Treasury bonds remain strong above 4.200%, on the benchmark 10-year and 5-year assets, and this will supply upthrust to the dollar. Elsewhere, BoE monetary policy committee member, Catherene Mann sounded a warning to investors, stating that they were expecting “too many” rate cuts in 2024. This hawkish remark could limit GBPUSD’s downside, ahead of Thursday’s release of GDP figures for the UK and the US.
The UK and the US will release their GDP figures for the fourth quarter of 2023 on Thursday. More pressure is on the UK, which entered a technical recession after two successive quarterly GDP contractions. The country is expected to report -0.3%, while the US is forecast to report a growth of 3.2%.
Technical analysis
GBPUSD pivot is at 1.2640, and the RSI indicator signals a neutral to the seller-controlled market. Price action below 1.2640 will favour control by the sellers, with the first support at 1.2650. A continuation of control by the sellers at that level will break the support and push to test 1.2590. Alternatively, the buyers could take control if they manage to return GBPUSD above 1.2640. However, the resulting upside momentum will meet resistance at 1.2655. The currency pair will likely breach that mark in extension, which will invalidate the downside narrative and head to 1.2670.
