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GBP/USD extends latest recovery ahead of UK GDP, US CPI

  • Extended trade talks shift market focus a bit towards the economic calendar.
  • The UK GDP and the US CPI will be in the spotlight.
The GBP/USD pair stretched its previous recovery to 1.3020 while heading into the London open on Friday. Given the trade talks at Washington being extended to the next day, economic calendar offering the UK GDP and the US CPI could regain its importance among global traders.

Buyers cheered positive headlines to the UK PM Theresa May’s position and greenback weakness in Thursday as the Cable bounced from the 200-day simple moving average (SMA).

However, risk-on during early negotiation phase between the US and China capped the pair’s moves a bit later.

With the lawmakers from both the economies agreed to discuss the trade matter forward tomorrow, investors may move to a preliminary reading of the UK gross domestic product (GDP) for first quarter (Q1) 2019 and March month production details. Further, the US consumer price index (CPI) for April can also entertain investors afterward.

The British GDP is expected to rise by +0.5% from +0.2% on a QoQ basis while likely increasing by 1.8% versus 1.4% prior on the yearly format. Moving on, manufacturing production growth could soften to +0.2% against +0.9% prior whereas industrial production might tick in at +0.1% compared to +0.6% earlier.

In the case of the US CPI, the headline figure could rise 2.1% YoY against 1.9% prior but might remain unchanged at 0.4% on a monthly basis. The CPI ex-food and energy, also known as core CPI, can rise to 0.2% and 2.1% respectively on monthly and yearly formats versus +0.1% and 2.0% priors in that order.

It should also be noted that risk sentiment concerning the US-China trade deal, Brexit and challenges to the PM May’s position might as well entertain the British Pound (GBP) traders.

Technical Analysis

A 100-day simple moving average (SMA) at 1.3000 can be considered as immediate support ahead of observing fortnight old trend-line at 1.2980 and 200-day SMA level of 1.2960. Should prices tick beneath 1.2960, 1.2920 and April lows near 1.2865/60 could gain market attention.

On the upside break of immediate descending resistance-line at 1.3055, the pair can rise to 50-day SMA level of 1.3090 and early-month highs near 1.3180.