GBP/USD Outlook: Pound Retreats as Down Q3 Progress Estimate…

• The UK financial system recorded no development within the third quarter.

• The pound rallied on Friday because the US greenback fell resulting from delicate inflation figures.

• US inflation rose by zero.1%, under estimates of zero.2%.

The GBP/USD outlook reveals additional weak spot within the UK financial system after the Workplace for Nationwide Statistics downgraded its estimate for Q3 development. In the meantime, the US greenback remained weak after Friday’s inflation figures got here in softer than forecasts. 

-Are you searching for one of the best AI Buying and selling Brokers? Test our detailed guide-

Knowledge on Monday revealed that the UK financial system recorded no development within the third quarter. This was a downgrade from the earlier studying of a zero.1% development. Consequently, the pound eased barely. Nonetheless, the Financial institution of England will seemingly stay cautious resulting from excessive inflation. A separate report on Friday confirmed that UK retail gross sales elevated by zero.2%, lacking forecasts of a zero.5% improve. 

In the meantime, the pound rallied on Friday because the US greenback fell resulting from delicate inflation figures. The US core PCE launched on Friday revealed that inflation rose by zero.1%, under estimates of a zero.2% improve. This prompted the buck to retreat from its weekly highs, giving sterling some aid.

Nevertheless, the outlook for the pair stays bleak. Final week, the greenback soared after the FOMC assembly, the place policymakers lower charges however delivered a hawkish outlook for 2025. The central financial institution expects to decrease borrowing prices by 50-bps subsequent 12 months. This was a deep downgrade from September, when policymakers have been prepared to chop by 100-bps. Market individuals at the moment are ready to see whether or not Trump will cross his coverage proposals after taking workplace in January.

GBP/USD key occasions in the present day

It is going to be a gradual vacation week for the pound. Subsequently, market individuals will proceed digesting final week’s occasions.

GBP/USD technical outlook: Rebound meets the 1.2601 resistance

On the technical facet, the GBP/USD value has rebounded to retest the 1.2601 resistance stage. The downtrend paused when bears didn’t commerce under the 1.2500 assist stage. Nevertheless, regardless of the pause and pullback, the downtrend stays intact because the value trades under the 30-SMA. On the identical time, the RSI suggests stable bearish momentum under 50. 

–Are you curious about studying extra about Canadian foreign exchange brokers? Test our detailed guide-

Furthermore, bears have resurfaced on the 1.2601 resistance, able to resume the downtrend. If this occurs, they’ll purpose for a brand new low under the 1.2500 assist. Alternatively, a break above the 1.2601 resistance and the 30-SMA will sign a possible bullish reversal.

Seeking to commerce foreign exchange now? Make investments at eToro!

67% of retail investor accounts lose cash when buying and selling CFDs with this supplier. It is best to take into account whether or not you possibly can afford to take the excessive danger of shedding your cash.