GBP Trading Outlook
The Sterling (GBP) the resilient pound brushed off the risk aversion and is looking to rally and test 1.6000 today. UK data has been mixed with FEB mortgage approvals dropping to 49k vs. 57.9k previously. Crosses though remain supportive with EUR/GBP back under 0.8350. Looking ahead, German Retail Sales forecast at 1.2% vs. -1.6% previously.
The Sterling (GBP) the main reason for underperformance in the GBP/USD overnight was the shock revision low of Q4 GDP down -0.3% vs. -0.2%. This dropped the y/y GDP to 0.5% and adds to the case further QE may be warranted at next week’s BOE meeting. Looking ahead, February UK Mortgage approvals forecast at 59k vs. 58.7k previously. Also March German Unemployment Change forecast at -10k vs. 0 previously.
The Sterling (GBP) strong Retail data allowed a test of 1.6000 in Europe but the market failed to break and we saw a pull back into the US session. The Pound is still the strongest risk currency in the market recently and GBP/AUD buying last night highlighted the dramatic change of fortunes since last recent all-time lows below 1.4500. Looking ahead, Q4 GDP forecast at -0.2% vs. -0.2% previously.
The Sterling (GBP) the GBP/USD broke back above 1.5900 retested the 1.5975 year highs. The 1.6000 key big figure is within striking distance and should be tested in the next 24 hours in the absence of fresh negative news. Looking ahead, UK March CBI distributive Trades forecast at -6 vs. -2 previously.
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