• The GBP/USD outlook remains flat near the lower end of the range despite an upbeat UK GDP data.
• Wednesday’s strong US data, including PPI and retail sales, are keeping the greenback supported.
• Technically, the GBP/USD price remains neutral within a broad uptrend.

The UK economy surprised to the upside in November, but the data failed to deliver meaningful upside for GBP/USD. Gross Domestic Product grew 0.3% MoM after October’s revised 0.1% contraction, comfortably beating the consensus for a 0.1% rise.

The improvement was broad-based; the services index rose 0.2% on a quarterly basis, up from 0.1% previously, while industrial and manufacturing production increased by 1.1% and 2.1%, respectively. This mix points to a resilient UK economy rather than the one feared, reducing near-term pressure on the Bank of England to ease policy quickly.

Yet the pound’s reaction has been muted, with GBP/USD up only around 0.03% near 1.3430 at the time of writing, as the UK data landed in the shadow of much stronger US releases.

Wednesday’s US Retail Sales rose 0.6% MoM in November, sharply reversing October’s 0.1% dip and beating the 0.4% forecast. Both the headline and core PPI were 3.0% YoY, above expectations. This suggests significant US demand and price pressures. These figures suggest the Fed should maintain rates for the next few meetings.

The markets expect a rate reduction later this year. The US Dollar Index’s strength around 99.00 highlights this narrative. Traders await the release of weekly unemployment claims and speeches by Fed officials. Political commotion regarding Fed independence and other global crises keeps traders more cautious, supporting the dollar.

Against this backdrop, today’s better UK growth figures are viewed as a one-month rebound rather than the start of a strong trend, which limits sterling’s ability to attract new buyers.
 

GBP/USD Technical Outlook: Consolidating Near Lower End of Range
 

(Click on image to enlarge)

GBP/USD 4-hour chart
 

On the 4-hour chart, GBP/USD is trading within a consolidation after its December rally. The price has been oscillating within a horizontal range roughly between 1.3425 and 1.3550. Recent candles have formed relatively small real bodies and overlapping price action, signaling indecision. The RSI sits just below the midline near 45, revealing a lack of momentum and the absence of extreme conditions.

Moving averages further highlight this neutral bias. The pair is hovering near the 20-period MA, while the 50? and 100-period MAs remain flat, converging slightly above price and acting as immediate dynamic resistance. Beneath the market, the rising 200-period MA, located lower at 1.3390, offers solid support.

As long as GBP/USD holds above the lower boundary of the range but fails to clear the 1.3500-1.3550 resistance area, traders are likely to continue fading moves within this band, waiting for a clear breakout in either direction.

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