Pound Sterling Rebounds on In-Line UK GDP, Focus Shifts to BoE Rate Outlook
The Pound Sterling (GBP) recovers slightly following the release of January's UK Gross Domestic Product (GDP) figures, which met market expectations. While factory output slumped, the in-line GDP data signals a shallower-than-expected recession, improving the economic outlook.
Key Factors:
- GDP Data: 0.2% growth in January suggests the UK recession may be milder than anticipated.
- BoE Rate Cut Expectations: Market focus remains on the timing of potential rate cuts by the Bank of England.
Technical Outlook:
- GBP/USD Near 1.2800: After a three-day decline, GBP/USD hovers around the 1.2800 support level.
- Potential Downside: A break below 1.2800 could trigger a move towards the 20-day EMA (1.2720), with further support at 1.2700.
- Fading Momentum: The Relative Strength Index (RSI) dropping below 60 suggests waning bullish momentum.