Release Time:2018-05-28 02:19
GBPUSD (1.3328) • UK GDP rose 0.1% in Q1, in line with expectations and the preliminary report. Private consumption and government spending was a little firmer while trade was weaker. The data do not really advance the debate about the policy outlook for the BoE in the near-term, especially as UK markets appear to be facing renewed worries about Brexit. Talks are not making progress on key issues and the EU is sounding very critical of the UK’s negotiating stance. This might see hard Brexit risks increase or it could trigger more political uncertainty in the UK – neither is good for the pound.
GBPUSD short-term technicals: bearish – Sterling is heading for its lowest close on the week this year versus the USD and looks poised to weaken further. The GBP’s slide out of the low end of the range that formed through early May is a clear negative and complements the broader, bearish signal generated by the loss of support at 1.3715 at the end of Apr. Trend signals are aligned bearishly across a range of timeframes which will limit the GBP’s ability to recover and encourage markets to fade minor gains. We look for the GBP to push lower to 1.31.