GBP/USD Trims Weekly Gains Ahead of US Data

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The GBP/USD currency pair on Friday pulled off the current weekly highs of about 1.3072 to trade at around 1.3028 ahead of crucial US retail sales data. The currency pair had rallied since the start of the week after bottoming 1.2874.

The rally pushed the pair above the descending trendline resistance prompting a bullish breakout. It has now surged to resume trading within the main sideways channel that dates back to early December.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of a busy period in the UK and the US markets. On Tuesday, the preliminary UK GDP for Q4 matched the expected change of 0.0%on a (QoQ) basis the (YoY) GDP outperformed 0.8% with 1.1%.

On the other hand, the (MoM) GDP for December beat the expectation of 0.2% with 0.3%. Industrial and Manufacturing Production for December missed the (MoM) expectations of 0.3% and 0.5%, respectively with 0.1% and 0.3%.

Preliminary total business investment for Q4 also outperformed the (YoY) expectation of -1.3% with 0.9% but the (QoQ) decline was worse than expected at -1% versus -0.6%. Manufacturing and Industrial Production for December also missed the 9YoY) expectations of -1% and -0.8% respectively with -2.5% and -1.8%.

In the US, the consumer price index for January missed the (MoM) expectation of 0.2% with 0.1% while the (YoY) growth beat 2.4% with 2.5%. Initial jobless claims of 205k from last week were also better than the expected claims of 210k.

GBP/USD Technical Analysis (the 60-min Chart)

Technically, the GBP/USD currency pair appears to have recently made a bullish breakout off a descending channel. The currency pair now appears to have resumed trading within the initial sideways channel. The bulls appear to have taken temporary control of the pair in the short-term.

They will be targeting short-term profits at around 1.3072 or higher at 1.3126. On the other hand, the bears will look to retake control by targeting profits at around 1.2989 or lower at 1.2947.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair appears to have recently made a bullish breakout off a descending channel. The pair is now trading within an ascending channel amid bullish pressure. It recently bounced off the ascending support trendline after struggling for momentum earlier in the year.

The bulls will be targeting long-term profits at around 1.3217 or higher at 1.3517. On the other hand, the bears will look to pounce for profits at around 1.2757, 1.2473 or lower at 1.2023.

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