GBP Trades in Narrow Range with Stagnant UK Economic Growth Prospects

The Pound Sterling (GBP) is currently trading within a narrow range, experiencing some support from improved market sentiment. However, its potential gains are limited due to the stagnant growth prospects for the UK economy. The GBP/USD pair's short-term performance hinges on how the UK economy performs in the fourth quarter of 2023.

Recent data regarding the UK economy suggests that the manufacturing sector has continued to decline in October, primarily due to increased borrowing costs and the ongoing cost-of-living crisis. This has cast a negative shadow on the growth expectations for the period from October to December.

The Bank of England (BoE) opted to keep interest rates unchanged at 5.25% for the second consecutive time on Thursday, aiming not to hinder the limited economic growth. Signs suggest the economy is narrowly escaping recession as business optimism has fallen to a 10-month low, prompting employers to significantly reduce payrolls, purchasing, and inventories. Regarding inflation, BoE Governor Andrew Bailey expresses confidence that the central bank can bring it down to the target of 2% within two years.

GBPUSD is touching the last support at 1.2070 waiting for more developments to find direction. The pair formed a descending triangle which is a bearish signal. If it breaks down then the 1.1900 will be the target.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2450	1.2300	1.2200	1.2000	1.1900	1.1800