- Manufacturing output in the US experienced its worst decrease in nearly two years.
- There are concerns that the world’s largest economy is heading for a recession.
- British consumer price inflation dropped to a three-month low of 10.5%.
Today’s GBP/USD outlook is slightly bearish. On Thursday, the dollar rose as demand for the safe-haven currency increased due to fears over the US economy’s growth.
–Are you interested to learn more about low spread forex brokers? Check our detailed guide-
Weak US data released on Wednesday indicated that manufacturing output experienced its worst decrease in nearly two years and retail sales fell by the most in a year in December, fueling concerns that the world’s largest economy is heading for a recession.
The Federal Reserve is likely to slow down the rate of rate hikes even more next month due to widespread indications of declining demand and falling inflation. However, it won’t halt its tightening of monetary policy anytime soon as long as the labor market is still tight.
On Wednesday, the pound made a slight gain versus the dollar as data revealed that British consumer price inflation dropped to a three-month low of 10.5% in December but is still close to 40-year highs.
The UK’s inflation data was roughly in line with forecasts, and the Bank of England (BoE) and consumers experiencing a cost-of-living crisis may have found some solace in the downward trend.
The BoE has increased interest rates nine times since December 2021 to reduce inflation, and markets presently give a 50 basis point rate hike at the upcoming meeting on February 2, an 82% likelihood.
The pound is trading near the $1.2446 six-month high reached last month, but the future is still bleak due to concerns about a recession, high inflation, and a cost-of-living crisis weighing on the British economy.
GBP/USD key events today
Investors will focus on economic releases from the US, including the initial jobless claims report and housing market data.
–Are you interested to learn more about forex signals? Check our detailed guide-
GBP/USD technical outlook: The bullish trend remains strong
The 4-hour chart shows GBP/USD is pulling back from recent highs at around the 1.2401 key level. Despite this, the bullish trend remains strong as the price trades firmly above the 30-SMA and the RSI above 50. The price has also been respecting the SMA as support, showing bulls are committed to pushing the price higher
Bears will likely retest the 1.2276 support level and the 30-SMA before the bullish trend continues by taking out the 1.2401 resistance.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Read Next
- SEO Powered Content & PR Distribution. Get Amplified Today.
- Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. Access Here.
- Source: https://www.forexcrunch.com/gbp-usd-outlook-risk-off-sentiment-pushing-usd-demand/