Release Time:2019-02-12 02:26
GBPUSD (1.2965) • The GBP has steadied after the volatility surrounding thursdays BoE policy decision. The UK releases Q4 GDP data today and may reflect some of the pessimism that overshadowed the central bank decision yesterday. Markets expect GDP growth of 0.3% Q/Q (slowing from 1.4% in Q3 to 1.3% in Q4 in year on year term). The hand-off to Q1 already looks pretty soft so disappointing data will hurt the GBP more. Next week also sees PM May return to parliament to try and advance her Brexit plan. She has assured NI that there will be no hard border and told her EU counterparts that the backstop will remain. She has not been able – so far – to gain any concessions on the backstop itself, however, and will not endorse much – or any of the Labour party’s own Brexit plan.
Another resounding defeat seems likely. GBPUSD short-term technicals: bearish – The GBP closed marginally higher after a choppy session yesterday. The wide swings – and the sharp rally off the intraday low, especially – may blunt near-term downside pressure.
We note that the GBP held the 40-day MA support (1.2841) yesterday but further gains are needed through the low 1.29s to lift the GBP technically in the short run. Trend signals remain more bearishly aligned and weekly price action remains negative. We favour fading GBP gains.