GBP value, information and evaluation:
- GBP/USD is edging nearer to a help line connecting the decrease lows in place on the every day chart since late Might.
- It has not been helped by both a stronger US Dollar after yesterday’s scorching US inflation numbers or by a combined bag of UK GDP knowledge launched earlier on this session.
GBP/USD is edging decrease in the direction of help from the downward sloping channel that checks in at the moment round 1.3315. If that ought to break, the pair could be at its lowest degree since late December final 12 months.
GBP/USD Value Chart, Each day Timeframe (November 16, 2020 – November 11, 2021)
Supply: IG (You’ll be able to click on on it for a bigger picture)
UK GDP disappoints
UK financial progress knowledge launched early within the London session haven’t helped GDP/USD however prompted solely a restricted response within the markets. On the plus aspect, GDP in September expanded by 0.6% month/month, above the 0.4% anticipated by economists. Nonetheless, the preliminary figures for the third quarter confirmed a progress charge of simply 6.6% 12 months/12 months, under the forecast 6.8%. Industrial manufacturing and manufacturing output numbers had been disappointing too.
Estimates for earlier months’ GDP progress had been revised decrease as properly, leaving GDP 0.6% smaller than it was in February 2020, shortly earlier than the UK went into its first Covid-19 lockdown.
As well as, the US Greenback continues to profit from US inflation knowledge launched Wednesday. These confirmed CPI at its highest for 30 years and inevitably boosted expectations that the Federal Reserve will tighten financial coverage earlier than most different main central banks.
Turning to the figures on retail merchants’ positioning in GBP/USD, IG consumer sentiment knowledge present 76.81% of merchants are net-long, with the ratio of merchants lengthy to quick at 3.31 to 1. The variety of merchants net-long is 26.08% greater than yesterday and 53.81% greater than final week, whereas the variety of merchants net-short is 30.37% decrease than yesterday and 41.13% decrease than final week.
Right here at DailyFX, we usually take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests GBP/USD costs could proceed to fall.Merchants are additional net-long than yesterday and final week, and the mixture of present sentiment and up to date adjustments offers us a stronger GBP/USD-bearish contrarian buying and selling bias.
— Written by Martin Essex, Analyst
Be happy to contact me on Twitter @MartinSEssex