GBP maintains value. Strong UK GDP Report and Gilt Yields in the Foreground. Long-term, the UK GDP might be displaying signs of fatigue.

GBP Key Considerations

Long-term, the UK GDP may be showing signals of weakness.

Rising gilt rates brings up the topic of pension plans.

FOMC is the main topic.

The focus is on trend-line resistance.

GBP rises prior to major central banks’ decisions on interest rates & Gilts

Due to British monthly (GDP) figures meeting forecasts. The pound’s value has emerged from the woods and is heading up to the north. Following a result of an analysis of UK economic data, the GBPUSD duo has reached a new 2-week peak. This suggests the (BoE) will keep raising interest rates.

Following a comparison review regarding the UK’s economic outlook with those of other countries, the pound’s value has showed an ascending upward movement.

Given how persistently high rates of inflation are in the UK, more interest rate increases from the BoE are likely.

As businesses increase their salaries to make up for a lack of workers. The UK’s labor earnings have remained more stable.

At the ground level, the UK GDP is favorable.

Today. the UK GDP was the main concern for investors, bringing the Sterling back into the spotlight. The UK GDP release exceeded estimates on the majority of indicators. Which has resulted in mostly flat trading for pound since yesterday’s strong closing (refer to economic schedule under). Features consist of:

After a 0.3% fall in March, the monthly GDP increased by 0.2% during April.

During the three months ending in April, GDP increased by 0.1 percent.

The services sector increased (0.3%) following declining by 0.5 percent in March.

Source: ONS

In conclusion, the study is generally positive in terms of GBP in the medium term. Notwithstanding certain issues concerning the industry and manufacturing sectors. Considering at the big picture, it appears that UK development is fairly stagnant, which may eventually give rise to alarm. In response to the positive UK economic figures,

UK Economic Activity Schedule

The highest rate for 2023 has increased significantly since yesterday’s employment report. Rising up approximately 5.48% to a nearly 5.77% or over 30 basis points.

The UK 2 Year Gilt Yield Rates

The UK two-year gilt rate is currently beyond the time period around previous PM Liz Truss and is at values that were last seen in 2008. This may renew worries about Defined – Beneficiary-pension systems. Because the worth of such schemes has historically moved counter to gilt rates.

Technical Perspective

Sterling is reasonably steady right now yet remains very much higher, according to price movement from the daily graph. Currently, focus will turn to the Fed’s release of interest rates. Given the prior day decreasing US CPI statistics, the FOMC statement is anticipated to result in a delay or bypass. Which, assuming the BoE maintains its present money market rates. It will reduce the interest rate disparity among both economies to the favor of a firmer pound.

The extended trend-line resistance region is being tested by GBP bullish traders at present. And a verification closure over this crucial pivot point might ignite a longer surge upwards to the 1.2680 spike top.

Major Technical Levels

Resistance levels:

• 1.2680
• Trend-line resistance

Support levels:

• 1.2584
• 1.2500
• 50-day MA
• 1.2400