GBP/USD rises despite stalling economic growth. Gold looks ahead to US data drop.
GBP/USD rises despite stalling economic growth
GBP/USD (FXB) is rising despite disappointing Q3 GDP data. The final reading revealed that the UK economy grew 1.1% in the July – September period, down from the preliminary reading of 1.3%.
The was also notably down from the 5.5% rise in GDP in the second quarter.
The data shows that the UK economy grew more slowly even before Omicron hit, which will be a threat to growth in the final months of the year.
The UK economy was 1.5% below where it was pre-pandemic and is still expected to return to pre-pandemic levels in Q1 2022.
Looking ahead US GDP & consumer confidence data will be in focus, in addition to Omicron headlines.
Where next for GBP/USD?
GBPUSD has been trending lower since June. The pair hit support at 1.3161 and is attempting to recovery from that yearly low.
The recovery has stalled at the 20 sma around 1.3265. A move above here is needed in order to expose the falling trendline support turned resistance at 1.33. Beyond here 1.3340 the December high comes into focus, above which buyers could gain traction.
Failure to retake the 20 sma could see the pair head back towards he 1.3170/60 area which could offer strong support.
Gold falls ahead of US data drop
Gold (GLD) is heading lower for a fourth straight day on Wednesday as it looks ahead to the release of US Q3 GDP data and the US Conference Board consumer confidence index.
The final Q3 GDP is expected to confirm 2.2% growth, down from 6.7% in the previous quarter. Meanwhile consumer confidence slumped to a 7 month low last month on rising prices and COVID cases. Morale could deteriorate further.
Where next for Gold?
Gold ran into resistance at 1714 last week and has been falling since. A drop below the 50 & 100 sma and the RSI moving into bearish territory is keeping the seller’s hopeful of further losses and a move back towards 1753 the December low with 1772 a potential support on the way down.
Any meaningful recovery would need to re-take the 100sma at 1788, and the 50 sma at 1800 in order to bring 1814 back into target.
Comments
Log in or sign up to join the conversation.