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The British Pound is seeing further selling today on the back of the latest UK growth data released this morning. The data, while a little better than forecast, pointed to anemic growth in the UK and has done little to push back against recession risks. The monthly GDP reading was seen at 0.2%, up from 0.1% prior, above the 0% the market was looking for. The preliminary quarterly GDP reading came in at 0%, down from 0.2% prior but slightly above the -0.1% the market was looking for.
 

BOE Implications

On the back of recent news flow regarding UK recession risks, and with the BOE having downgraded its growth outlook for the coming year, the data isn’t enough to lift sentiment in GBP. Against the more robust US economy and with further Fed hikes still a very real risk, GBPUSD looks vulnerable to further downside through year-end. The BOE warned last time around that rates would likely need to rise again if inflation doesn’t continue lower. However, the knock-on effect from that message looks to be a further concern for the UK growth outlook, keeping GBP pressured for now.

Technical Views

GBPUSD

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The breakout above the bear channel ran into heavy selling pressure at the 1.2437 level. Price is now fast approaching a test of the 1.2171 level which, if broken, paves the way for a much deeper move, in line with falling momentum studies readings. Longer run, 1.1843 is the next bear target. 

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