GBP/USD Technical Outlook: Bearish Trend Continues as Pair Tests Resistance at 1.1940

Posted Friday, March 10, 2023 by
Arslan Butt • 1 min read

In the European session on Friday, the GBP/USD exchange rate gained ground and is currently trading near 1.1950. The UK’s real GDP increased by 0.3% in January, which surpassed the market’s prediction of 0.1% growth. However, the latest data from the Office for National Statistics (ONS) showed a decline in the industrial sector’s activity in January.

Manufacturing output for January was -0.4% MoM, lower than the predicted -0.1% and December’s 0%. Similarly, total industrial output came in at -0.3% MoM, lower than the predicted -0.2% and November and October’s 0.3%.
The annualized rate of decline for UK manufacturing output in January was 5.2%, behind the market expectation of 5.0%. Meanwhile, overall industrial output fell by 4.3% in January, worse than the predicted -4.0% and the -4.0% drop seen in December.

Separately, the UK’s goods trade balance for January came in at GBP-17.855 billion, compared to the forecast of GBP-17.75 billion and the actual figure of GBP-19.271 billion. The non-EU trade surplus rose to £7.808 billion in January from £7.484 billion in December.

GBP/USD Technical Outlook

The GBP/USD pair tested the 1.1940 resistance level but remained stable below it, with the EMA50 adding more strength to the resistance. The pair is likely to continue its downward correctional wave with a goal of 1.1625. Stochastic indicators show clear negative signals, suggesting a potential decline in upcoming sessions. The pair is trading within a bearish channel, as the chart depicts.

Therefore, our bearish outlook remains valid and active. It is important to note that if the pair breaches the 1.1940 and 1.2020 levels, the expected decline may be halted, and the price could begin to recover. The expected trading range for today is between the support level of 1.1820 and the resistance level of 1.1990.

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