GBP/USD Climbs To Two-Week Highs Despite Weak UK Data
2022.09.13 04:03
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The Cable started the week strongly amid a better mood across the markets. The pair gapped higher and stretched to its highest level since Aug. 30 despite weaker-than-anticipated U.K. data.
At the time of writing, the GBP/USD pair is trading at the 1.1680 area, posting a 0.8% daily gain, having set a high of 1.1704 earlier on the day.
UK grew slower than expected by 0.2% in July, below the market consensus of 0.5% but bounced after a contraction of 0.6% in June.
At the same time, decreased by 0.3%, while the market expected an expansion of 0.4%, and expanded at a slower-than-expected rate of 0.1%, below the consensus of 0.6%.
Other data showed that the Index of decreased by 0.2%, while the U.K. deficit was confirmed at £7.79 billion as expected.
Still, the pound managed to post daily gains for the second session in a row as the greenback staged a downward correction across the board.
The U.S. dollar, measured by the , fell to its lowest in two weeks at 107.81 before trimming losses.
Investors focus on figures, which will be released on Tuesday, as they could play an essential role in the FOMC next week.
The WIRP tool points to 90% odds of a 75 bps rate hike by the Fed, while the BoE’s has been postponed to Sept. 22 in the light of the Queen’s death.
Investors are betting on a 60% probability of a 75 bps increase in that meeting.
The short-term technical outlook for the GBP/USD pair remains bearish, although it has improved according to the daily chart.
The RSI gained a significant positive slope, while the MACD crossed above its signal line and printed a green bar for the first time since mid-August.
On the upside, the next critical resistance stands at the 20-day SMA, currently at 1.1710. A break above could pave the way for an advance towards the 1.1750 zone and then to the 1.1800 psychological mark.
On the downside, the immediate support could be found at the 1.1600 level. A loss of this area would expose the 1.1500 zone, and the cycle low hit on Sept. 7 at 1.1404.
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