GBP/USD continues to have a quiet week, as the pair is drifting in the Friday session. In the European session, the pair trading at 1.2940, up 0.02% on the day.
British GDP falls short of estimate
The UK released its monthly GDP earlier on Friday, and the reading was a disappointment. The August reading showed that the economy gained 2.1%, well off the estimate of 4.6%. In July, the economy gained 6.6% percent. Manufacturing data was also softer than projected. Manufacturing Production slowed sharply to 0.7% in August, down from 6.3% beforehand. The estimate stood at 3.2 percent. It was a similar story from Industrial Production, which fell to 0.3%, down from 5.2%. This missed the forecast of 2.6%. Despite the soft numbers, the pound is unchanged on Friday.
Brexit tensions weigh on cable
With the clock ticking towards the divorce between the EU and the UK at the end of the year, the sides remain at an impasse, with fishing rights and state aid programs among the key sticking points. Tensions rose another notch last week when the EU said it had launched legal proceedings against the UK over the proposed Internal Market Bill, which the UK acknowledged breaches the withdrawal agreement which London and Brussels signed last year.
GBP/USD Technical
- There is resistance at 1.2963. Above, there is a resistance line at 1.3054
- We find support at 1.2824, followed by support at 1.2776
- GBP/USD continues to put downward pressure on the 20-day MA. If the pair breaks below this line, it would signal a downward trend
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