GBPUSD is drifting lower toward 1.2925, facing downward pressure after weak UK GDP data. Immediate support is seen at 1.2900, with further downside toward 1.2850. If the pair finds bullish momentum, resistance remains at 1.2980 and 1.3050.
Fundamental Factors Affecting GBPUSD
- Weak UK GDP Data: January’s GDP contracted by 0.1% Month over Month, missing expectations of 0.1% growth, weighing on the Pound.
- Industrial Production Drop: UK Industrial Production fell 0.9% Month over Month, worse than the expected -0.1%, adding to economic concerns.
- BoE Policy Outlook: The Bank of England is expected to hold rates at 4.5%, signaling a cautious approach to easing.
- Fed Rate Cut Bets Rise: Softer US inflation data has increased expectations of a Fed rate cut in June, with markets pricing in a 75% chance of a 25 bps cut, supporting the USD.
Key Takeaway for Traders
GBPUSD faces downside pressure due to weak UK economic data, while rising Fed rate cut bets could limit losses. Traders should watch for further UK economic releases and the Michigan Consumer Sentiment Index for fresh direction. A break below 1.2900 could accelerate losses, while a rebound above 1.2980 may shift momentum bullish.
GBPUSD – H4 Timeframe
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The 4-hour timeframe chart of GBPUSD highlights the presence of an SBR pattern, with additional confluence from the drop-base-rally demand zone, the FVG area, and the induced low. This provides an avenue for the liquidity sweep. The sentiment here is bullish.
GBPUSD – H1 Timeframe
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The 1-hour timeframe chart of GBPUSD shows that the demand zone occurs between the 76% and 88% Fibonacci retracement levels, a substantial reversal area. Combining this with the higher timeframe sentiment, we see price reversing from within the highlighted demand area.
Analyst’s Expectations:
Direction: Bullish
Target- 1.29906
Invalidation- 1.28433
CONCLUSION
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