Market Analytics and Considerations
Key notes
- UK GDP Revisions Lower, Overall -0.3% vs. Revisions Figures of 4%.
- This Quarter, the Real Household Disposable Income (RHDI) decreased by 0.5%; this is the fourth straight quarter in which the RHDI has experienced sharp decline.
- GBP/USD Holding Tight to the 200-Day MA
The 200-day MA is barely underneath the 1.2100 area, and GBP/USD is still teetering on a break or recovery of it. The absence of liquidity undoubtedly had a factor in the softer UK Q3 GDP numbers that were released earlier this morning but unable to spur a break below. The information gives the idea that the UK has entered a recession more support.
According to a downwardly revised from the initial estimate of 0.2%, the UK GDP data is now projected to have decreased by 0.3% in Q3. Since 2022 has seen down adjustments, real GDP is now projected to be 0.8% lower than it was before the outbreak (increased from the earlier projection of have been below 0.4%).
During quarter, the real household disposable income (RHDI), which has experienced stagnant growth for four straight quarters, decreased by 0.5% as a result of the growing cost of living. From a first assessment drop of 0.2%, the output is now anticipated to have dropped by 0.3%, primarily due to adjustments to forecasts of manufacturing and construction activity.
Despite a decline in the majority of service subsectors, the third quarter of 2022’s services output increased by 0.1%, beating the initial prediction of flat output. Services output, which was earlier 0.9% below pre-coronavirus (COVID-19) pandemic values, has now become 1.3% below the other tiers for Quarter 4 (Oct through Dec) 2019. The UK’s trade deficit for goods and services did decrease in the third quarter of 2022.
Market impulse
The 200-day MA continues to function as support for GBP/flirtation. USD’s Although the lower dollar has helped the pair edge higher in early European trade, this morning’s poorer than anticipated GDP statistics appeared to have the potential to allow a breach below. As the week comes to a close, potential gains are expected to be constrained by the dismal GDP statistics and the BoE’s last week’s somewhat subdued tone.
A daily candle break and closure below the 200-day MA may result in a test of the crucial 1.2000 barrier for the pairing, which is gained 60 pip from its daily trough around at the 1.2060 level. Should there be further upward movement, upward resistance is located near the 1.2200 mark.