The GBPUSD exchange rate is heading for the January resistance ahead of data on Friday.
GBPUSD – Daily Chart
GBP/USD can provide traders with a range of opportunities on a breakout or reversal.
According to the Commerce Department, inflation-adjusted GDP increased by 2.6% for the final quarter of 2022. Economists were looking for the figure to remain at 2.7%, according to Refinitiv.
The US economy slowed from 3.2% annualised growth in the third quarter. Slower consumer spending, export reductions, and a continued slowdown in the US housing market were to blame. The United States housing market has slowed for seven quarters due to inflation pressures hurting investment and buying.
UK GDP Report Announcement
The UK releases its latest GDP numbers on Friday as British businesses expect some improvement in conditions over the following months. A poll by the CBI said that a majority of 55% of firms are predicting growth in the private sector for April to June. That marks the first positive outlook for growth since April 2022.
Manufacturing companies were more optimistic, and UK car production improved with increased exports to the UK. However, the CBI’s lead economist said the country is ‘skirting stagnation’ rather than growing. “It’s encouraging that the private sector is expected to return to growth in the months ahead, chiming with a range of other data indicating some resilience in economic activity”.
The US also has data released tomorrow with a PCE inflation number and Michigan Consumer Sentiment. The pound sterling is still elevated from its recent high inflation reading. With a reading above 10% and US inflation dipping below 7%, interest rates will remain higher for the UK economy. Traders should expect a test of resistance and look for the reaction from the exchange rate.
