GBPUSD
The GBP/USD is trading down -0.7% at around 1.3825 against the US Dollar after the first quarter GDP data in the UK fell short of the market expectations. With the UK GDP decelerating sharply in the first quarter, the chances of a rate hike are diminishing greatly weighing on Sterling.
The UK GDP was expected to increase 0.4% over the quarter during the first three months of this year, but it rose mere 0.1% over the quarter, much less than expected.
The bigger picture on GBP/USD is formed by the interest rate expectations that have shifted to the downside after the disappointing trinity of the most important macro releases in the UK with wage growth, inflation, and the retail sales in March falling short of expectations. On top of it it was the Bank of England Governor’s speech last week that left all options open for the Monetary Policy Committee for its upcoming policy meeting on May 10, when the Bank also releases its quarterly macroeconomic forecasts in the Inflation Report. The Inflation Report is followed by a press conference with the Bank of England Governor Carney justifying the policy decision with markets betting on the timing of the rate move for the Inflation Report release.
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Watching closing price. Need for confirmation on breaking neckline for rapid selling. Short to major resistance