GBPUSD Price and US Q4 GDP:
- US Q4 2018 GDP beats expectations but Q1 2019 growth likely to slow.
- Sterling consolidation ahead of renewed upside move.
GBPUSD is backing off in early NY turnover after US Q4 GDP beat market expectations – 2.6% vs 2.2% – giving the greenback a small bid. The US data showed that business investment and private consumption remained firm with a sharp rise in intellectual property rights (13.1%) helping to fuel the uplift. However recent poor US hard data, including December’s shockingly weak retail sales, point to a slowing US economy and today’s print may be the best for some quarters, signaling a softer greenback in the weeks ahead.
On the left-hand side of GBPUSD, Sterling continues to push higher as No Deal Brexit concerns dissipate. No firm developments have yet been decided or at least disclosed, reigning in the British Pound, but further upside looks the path of least resistance. Today’s short-term setback in the pair could continue back down to a cluster of supports between 1.3220 (January 25 high) and 1.3177 (38.2% Fibonacci retracement) but further losses from here will likely need a negative Brexit headline to give the move momentum. The recent move above the September 20 high around 1.3300 needs to be closed above to add confirmation to further upside moves. The RSI indicator is in overbought territory, after the recent rally from the February 14 low around 1.2770 and should be respected.
GBPUSD Daily Price Chart (February 2018 – February 28, 2019)
Retail traders are 45.3% net-long GBPUSD according to the latest IC Client Sentiment Data, a bullish contrarian indicator. Recent changes in daily and weekly sentiment however give us a mixed trading bias for GBPUSD.Weekly short-positions are 35.7% higher than last week, as retail seemingly sell into the recent rally.