GBP/USD on track for the fifth consecutive weekly gains
- The GBP/USD is set to end the week higher for the fifth straight time.
- The pair is reacting to the mixed economic data from the UK today.
- The US dollar also rose against most currency pairs
The GBP/USD price pushed lower today after the mixed UK GDP data. The pair is trading at 1.3787, 0.58% below this week’s high of 1.3865. Still, the pair is on track to end the week higher for the fifth consecutive time.
UK GDP data
The Office of National Statistics (ONS) published the latest estimates of the UK fourth-quarter GDP numbers.
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The bureau reported that the UK economy grew by 1.0% in Q4 after rebounding by 16.1% in the third quarter. Still, the economy was 7.8% lower than in the same period in 2019. For the year, the UK economy shrank by 9.9%, the worst contraction in more than 300 years. The country’s contraction was also lower than that of its peer countries because of its reliance on services.
The ONS also published mixed industrial and manufacturing production numbers. In December, industrial production rose by 0.2%, a decline from the previous month’s 0.3%. The manufacturing production rose by 0.3%.
Further data showed that the important construction sector also struggled in December. Output declined by 2.9% from the previous month and by 3.7% on an annualised basis. This performance was mostly because of the lockdown measures put in place by the government.
Analysts believe that this weakness continued in January because of the nationwide lockdown. Therefore, the Bank of England (BOE) will still be under pressure to push interest rates to the negative zone.
The GBP/USD also declined because of the relatively strong dollar. The dollar rose against most currencies in the dollar index. It rose by 0.20% against the euro, 0.32% against the Canadian dollar, and by 0.30% against the Japanese yen. The performance of the US dollar is probably because of the rising hopes of stimulus in the United States.
GBP/USD technical outlook
The daily chart shows that the GBP/USD has been on a strong uptrend in the past few months. Recently, it has formed an ascending channel that is shown in pink. Also, it remains above the Ichimoku cloud, which is a sign that bulls are in control. Therefore, the pair will likely continue rising as bullish forex investors attempt to reach the upper side of the channel at 1.3900.