GBPUSD Forecast: British Pound to Remain Constrained Today
The GBPUSD price is wavering after it crashed by more than 0.50% yesterday in reaction to the disappointing UK GDP data. It is trading at 1.3123, which is the lowest it has been since Monday this week.
Today, the UK and US economic calendar will have no major events. Indeed, the only major data will come from the United States, where the statistics bureau will release the October producer price index (PPI) data.
Still, even this data will not have a major impact on the GBPUSD because the market already expects it to be weak. Furthermore, US consumer price index data came in weaker than expected yesterday. Most importantly, the Fed has already signalled that it won’t hike interest rates at least before 2023.
Therefore, the GBP/USD will today react to any new developments on Covid vaccine and US politics. Any new positive news on a vaccine will probably push the pair higher. Also, being a Friday, we may get new information on whether Donald Trump will concede that he lost the election or not.
GBPUSD technical analysis
In my technical outlook yesterday, I predicted that the GBPUSD price would rise and reach 1.3315 if the GDP data came in better than expected. That view was wrong since the UK Q3 GDP numbers were worse than expected. But I also wrote that, “weak data will likely push the price below 1.3200.” That’s what happened.
Today, on the four-hour chart, we see that the GBP/USD price decline has stalled a bit. It has remained unchanged in the past 12 hours, forming what seems like a bearish consolidation pattern.
As you will find in our free forex course, this is usually a bearish sign, which means that the pair may breakout lower. If this happens, the next level to watch will be 1.3000 and later 1.3080. However, this case will be invalidated if this price moves above 1.3200.