GBP/USD prices have thus far avoided a breakout to the downside, staying comfortably above the key support level at 1.3400 early Wednesday in the Asia-Pacific trading session. The pair is trading flat on the year with modest gains today, just above 1.3405. This is a testament to its resilience in spite of the economic data that has bombarded the US dollar.
The recent moves in GBP/USD can be mostly attributed to a string of weaker than anticipated economic data out of the United States. With the Greenback under pressure, foreign investors are increasingly attuned to seeing how forthcoming data releases could worsen FX-related currency valuations.
On Wednesday, four important economic reports are scheduled to be released, any of which could have a strong impact on GBP/USD’s performance. Get ready for the next US ADP Employment Change release. It uncovers important clues about the health of the jobs market, a powerful driver of overall market sentiment. On top of that, the Personal Consumption Expenditures Price Index (PCE)—the Fed’s preferred measure for inflation—will be released too. These indicators are particularly important since they will likely determine the overall monetary policy course of the Federal Reserve.
Furthermore, the Flash Q1 Gross Domestic Product (GDP) report is expected to shed light on the overall economic health of the US. Analysts predict increased volatility in the currency markets. This is particularly the case for GBP/USD with traders keenly reacting and shifting their positions in response to the most current data results.
In this backdrop, GBP/USD traders should continue to keep on their toes. The combination of these economic indicators could be a recipe for a trigger point to more action from the exchange rate.
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