Pound Sterling (GBP) Analysis
Risk Events for the Week Ahead
Tomorrow UK PMI data will shed some light on the state of the UK economy as stagflation concerns continue. On Wednesday, we have the FOMC[3] meeting minutes which has been known to cause elevated short-term volatility. Thursday we have the second estimate of Q1 GDP which is unlikely to cause any major movements provided we see a similar figure to the flash data. Then finally, on Friday we have US PCE inflation data which is forecast to provide a second successive month of lower data.
Customize and filter live economic data via our DaliyFX economic calendar[4]
UK PMI Data in Focus
After the month-on-month growth contraction in March, traders and investors will be closely monitoring complementary data prints that provide an indication of future economic activity.
All PMI data apart from the euro[5] zone took a negative turn in the recent respective prints but remain above the 50 mark. Tomorrow we have UK manufacturing and services PMI data which are both readings expected to continue the trend lower. The fundamental picture for the UK certainly faces many challenges, mainly: stagflation concerns and the prolonged issues around the Northern Ireland protocol governing goods entering Northern Ireland and possibly the rest of the EU from the UK.
Comparative PMI data (Select Major Economies)
Source: TradingView, prepared by Richard Snow[6]
GBP/USD Key Technical Analysis
Sterling has taken advantage of the softer US dollar[7] and made some headway after printing the yearly low at 1.2265
