GBP/USD Outlook: Unable to Keep Gains amid Hawkish Fed, Awaits Data
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- GBP/USD struggles to stay above the 1.3200 mark.
- Fed’s hawkishness continues to pressure the pound.
- Market participants will be watching the US CPI and UK’s monthly GDP numbers for October to confirm the economic transition.
The GBP/USD price outlook remains negative as the attempt to recover the losses remains capped at key levels while hawkish Fed also helps the bears.
At press time, the GBP/USD price is struggling to find direction near the 1-year lows and protecting the 1.3200 level. Recent weakness in the cable pair could be related to concerns that Brexit-related economic problems, coupled with recent lockdown measures, will dissuade the Bank of England (BOE) from raising interest rates.
On the other hand, growing concerns about the Fed’s next move have led to more downward pressure on the cable pair. In addition, recent moves on the pair have been stymied by market expectations for US consumer price index (CPI) data.
Due to the focus on us inflation, the GBP/USD pair traders won’t have much fun with today’s UK data dump. nonetheless, softer data can push the price to a new year low without hesitation.
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Cable traders can keep themselves occupied in the gloomy hours of early Friday with GDP data as of October 2021 on the UK economic calendar. This period is important since the trade balance and industrial production data pertain to a specific period.
Market participants will be watching the monthly GDP numbers for October to confirm the economic transition amid Omicron fears and new activity restrictions following a 0.6% rise in activity in the previous month.
UK GDP is predicted to decline by 0.4% in May compared to the previous month, down from + 0.6%. However, traders are also looking forward to the services index (3M / 3M) for the same period, + 1.6% in April.
In October, it is expected that manufacturing production will increase from -0.1% to + 0.0% m/m2. However, the total industrial output is expected to rise from -0.4% m/m to +0.1%.
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GBP/USD price technical outlook: Lacking directional bias
The GBP/USD price is attempting to keep bids above 1.3200. However, the 20-period SMA is continuously resisting the rallies. As a result, the price may plunge back below the 1.3200 mark and attempt a test of fresh YTD lows around 1.3100. Alternatively, if the price manages to break above the 20-period SMA and 1.3240 hurdle, we may see a rise towards 1.3300 ahead of 1.3350.
