GBP/USD Forex Signal: Stuck in a Tight Range Ahead of UK GDP – 31 March 2022
The pair will likely remain in this tight range until the US publishes the latest jobs numbers on Friday.
Set a buy-stop at 1.3165 and a take-profit at 1.3225.Add a stop-loss at 1.3100.Timeline: 1 day.
Set a buy-stop at 1.3130 and a take-profit at 1.3060.Add a stop-loss at 1.3200.
The GBP/USD price moved sideways after the relatively strong American jobs data and the impact of the ongoing crisis in Ukraine. It is trading at 1.3144, which is slightly above its lowest level this week.
UK GDP Data
The Office of National Statistics (ONS) will publish the latest GDP numbers from the UK. Based on the initial two estimates, analysts expect that the UK economy had a strong Q4 even as the Boris Johnson administration implemented new lockdowns because of the Omicron variant.
Analysts expect the numbers to reveal that the headline GDP expanded by 1% on a QoQ basis. This translated to an annual growth of 6.5%. Most of this growth will be because of the strong consumer spending because of Christmas shopping.
The other key data to watch will be the house price index estimate by Nationwide Society. Economists expect the data to reveal that home prices held steady in March as supply continued being limited. Precisely, they expect these numbers to reveal that the HPI increased by 0.8% on a MoM basis and by 13.5% on a YoY basis.
Still, the biggest concern about the UK economy is the energy sector considering that the UK buys a lot of oil and natural gas from Russia. In a statement on Tuesday, Andrew Bailey warned of the unprecedented shock that the UK will go through if Russia cuts off oil to western countries.
The GBP/USD will also react to the latest economic data from the United States. The Bureau of Labor Statistics is expected to publish weaker initial jobless claims numbers. Initial claims are expected to have risen from 187k to 197k. These numbers will come a day ahead of the official NFP data. On Wednesday, data by ADP revealed that the country’s private sector added over 455k jobs.
The GBP/USD is in a consolidation mode ahead of the latest UK GDP and US NFP data. It is trading at 1.3154, where it has been consolidating at in the past few days. This is evidenced by the fact that the Average True Range (ATR) has dropped to the lowest level in months. The Bollinger Band Width has also declined while the price is hovering at the 50-day moving averages. The MACD is pointing upwards.
Therefore, the pair will likely remain in this tight range until the US publishes the latest jobs numbers on Friday.