GBP/USD made a move to the upside but eventually ended the week lower. Where next? The first week of April features the all-important purchasing managers’ indices. Here are the key events and an updated technical analysis for GBP/USD.
UK GDP was confirmed at 0.4% q/q and 1.4% y/y. While this was no surprise, the numbers are far worse than those of the US: 2.9% annualized and 2.3% y/y. On Brexit, there were hopes for some kind of a solution on the Irish border, but things are still to be seen. In the US, trade tensions between China and the US eased and this contributed to the stronger dollar.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
GBP/USD Technical Analysis
Pound/dollar enjoyed a surge to 1.4260, near the 1.4280 line mentioned last week. It then turned sharply lower but held above 1.40.
Technical lines from top to bottom:
1.4345 is the January 2018 swing high that is worth watching. 1.4280 was a top line in early February and it comes next.
1/4260 was the high point in March and provides another line of defense. 1.4150 capped the pair in mid-February.
1.4070 is next, after serving as a swing high in late February. It is followed by the round level of 1.40, which is eyed by many.
1.3935 capped the pair early in March and remains a battle line. 1.3790 was a swing low in mid-March.
1.3765 was the low point in early February. 1.3710 was a low point in early March.
I am bearish on GBP/USD
The British economy is not doing that well and the sugar rush from the transition deal has faded. The PMI data could serve as a reality check and the US NFP may push the pair lower still.
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