Daily Analysis GBPUSD - 14 Aug 2023

The UK's Office for National Statistics announced on Friday that the Real Gross Domestic Product (GDP) of the UK expanded by an annual rate of 0.4% during the second quarter, surpassing market expectations of a 0.2% growth. Additional data from the UK revealed that both Industrial Production and Manufacturing Production exhibited positive growth, rising by 1.8% and 2.4% respectively on a monthly basis in June.

Although the immediate response from the market provided a boost in demand for Pound Sterling, the bearish start to trading in the UK's FTSE 100 Index tempered the currency's upward momentum. Concurrently, US stock index futures initially rose during the Asian session but later turned negative, underlining a sense of caution prevailing in the market.

The upcoming release of Producer Price Index (PPI) data from the US holds the potential to inject fresh momentum into the latter half of the trading day. Following the report from the US Bureau of Labor Statistics indicating that both the Consumer Price Index (CPI) and the Core CPI had increased by 0.2% on a monthly basis in July, the US Dollar displayed resilience against its counterparts. For the year-on-year comparison, the PPI is projected to rise by 0.7%. Unless there is a significant downside surprise, the USD might maintain its stability leading into the weekend, particularly if the main indexes of Wall Street begin trading in negative territory.

The GBP/USD found support at the 1.2650 level and formed a double bottom while the next resistance level is at 1.2820 and the support will be again at 1.2650.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400