As of early Friday in the European trading hours, the GBP/USD exchange rate hovers near $1.2530, reflecting a cautious stance despite optimistic economic indicators from the UK.

Recent data from the Office for National Statistics indicated that the UK’s Gross Domestic Product (GDP) for February showed a marginal increase of 0.1% month-on-month, aligning with forecasts but down from a 0.3% expansion previously. Despite these figures, the pair remains subdued, influenced by broader market expectations.

Impact of UK Industrial and Trade Data on GBP/USD

Further supporting the economic landscape, UK Industrial Production for February outperformed expectations, registering a 1.1% rise month-on-month, a notable recovery from January’s 0.3% decline. Additionally, the UK’s Goods Trade Balance for February showed a slight improvement, reporting a deficit of GBP -14.212 billion, better than the anticipated GBP -14.5 billion. However, these positive developments have not sufficed to bolster the GBP, as traders speculate on a potential earlier interest rate cut by the Bank of England compared to the US Federal Reserve.

US Economic Indicators and Federal Reserve Actions

On the other side of the Atlantic, recent US economic releases have shaped expectations differently. A hotter-than-expected Consumer Price Index (CPI) and robust Nonfarm Payrolls (NFP) figures have fueled speculation that the Federal Reserve may delay any planned interest rate reductions. This anticipation lends strength to the US Dollar, posing challenges for the GBP/USD pair.

Market participants are poised to further dissect the economic outlook based on the forthcoming US Michigan Consumer Sentiment Index and remarks from Federal Reserve officials Bostic and Daly, which could significantly influence the currency pair’s trajectory.

In summary, the GBP/USD price remains under pressure at $1.2530, with the pair’s movements being tightly correlated to diverging monetary policy expectations between the Bank of England and the Federal Reserve. As investors digest incoming data and central bank cues, the GBP/USD pair’s direction will likely be shaped by these economic and policy developments.

GBP/USD Price Forecast: Technical Outlook

The GBP/USD pair is currently trading at $1.25396, marking a slight decline of 0.11%. Looking at the four-hour chart, key levels have been identified for traders to monitor. The pivot point is set at $1.2572, acting as a crucial threshold.

Immediate resistance levels are noted at $1.2628, $1.2669, and $1.2716, which could cap upward moves. On the downside, support begins at $1.2516, with further cushions at $1.2471 and $1.2421, potentially halting declines.