GBP/USD is consolidating after pulling back from its intraday gains in Monday’s session. The market is slowing down as investors await the UK GDP data. A higher than the prior month’s -2.9% will strengthen the pound against the US dollar. The pair will also seek cues from the industrial production, manufacturing production, and trade balance numbers set for release today.
As for the industrial and manufacturing production, analysts expect February’s reading to be at 0.5% in each case. This will be an increase from the previous -1.5% and -2.3% respectively. Later in the day, GBP/USD will be reacting to the US core CPI data.
Currently, the sterling pound is finding support from the current phase of economic reopening in the UK. However, the US inflation data and the ongoing earnings season will influence the value of the currency against the greenback.
GBPUSD Technical Outlook
GBP/USD managed to breakout of the descending channel in the previous session and has remained above it early on Tuesday. Besides, on a four-hour chart, the pair is trading along the 20-day exponential moving average and above the 50-day EMA.
While the outlook is rather neutral, I have a bullish bias ahead of the UK GDP data. If the bulls manage to push the price past the current resistance level of 1.3768, the next targets will be 1.3850 and 1.3920.
However, this thesis will be invalidated if GBP/USD moves back to the descending channel. If that happens, the support levels will be at 1.3700 and 1.3670. Below that point, the bears will be targeting 1.3573, which will be its lowest level since early February.
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