The preliminary reading of U.K. GDP is expected to remain unchanged from initial estimates of -0.5%. However, given the lower revisions in growth by the IMF and OECD for the country we may a downward surprise. Despite the expected hold in GDP, personal consumption is expected decline which may be a more critical number looking forward.
Fundamental Outlook
The preliminary reading of U.K. GDP is expected to remain unchanged from initial estimates of -0.5%. However, given the lower revisions in growth by the IMF and OECD for the country we may a downward surprise. Despite the expected hold in GDP, personal consumption is expected decline which may be a more critical number looking forward. If consumers continue to retrench then the prospects of a rebound in domestic growth will be diminished. An unchanged reading could spark bullish sentiment validating the technical outlook for a wave higher to test 1.60 in the near-term. However, further contraction could lead to selling pressure continuing the current downward trend.
Technical Outlook
Altering the structure slightly, the rally from 1.4554 is probably wave 4 of (3) (within a 5 wave decline from 2.1160). Significant resistance does not begin until 1.60.
For More Technical Analysis Visit the Daily Technical Report
To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com