GBPUSD Sinks as Buyers Unimpressed by UK GDP29 May, 2015 by Aayush Jindal in Fundamental Analysis, Market Analysis
- British Pound continued to weaken against the US Dollar, and traded lower towards 1.5300.
- In the UK, the Gross Domestic Product released by the National Statistics posted an increase of 2.4% in the first quarter of 2015, compared to the same quarter of 2014.
- In terms of the quarterly change, the UK GBP grew by 0.3%, lower compared with the forecast of 0.4%.
Earlier during the London session, there were some major releases in the UK, including the Gross Domestic Product, representing the sum of goods and services produced within the economy less the value of goods and services used up in the production process released by the National Statistics. The forecast was slated for an increase of 0.4% in the first quarter of 2015, compared to the preceding quarter. The outcome was softer-than-expected, as the UK GDP increased by 0.3%. When we look at the yearly change, the UK GDP rose 2.4% in first quarter of 2015, compared to the same quarter a year ago.
The report mentioned that the output components of GDP were higher in Q1 2015 for production and services, but there some decreased noted for agriculture, forestry and fishing and construction. Production output climbed higher by 0.6%, and Manufacturing increased by 1.3% first quarter of 2015, compared to the same quarter a year ago.
UK Total Business Investment
The UK Total Business Investment was also published by the National Statistics, which was around the market expectation. It increased by 1.7% first quarter of 2015, compared to the preceding quarter in which it declined by 0.9%. In terms of the yearly change, the UK Total Business Investment rose 3.7%, which was similar to the last reading.
Overall the data was not encouraging, and GBPUSD buyers failed to hold the ground. There was a downside reaction after releases in the UK.
GBPUSD – Technical Analysis
The GBPUSD pair dived sharply Intraday and even traded below the 1.5300 support area. There is a support trend line formed on the hourly chart, which held the downside.
Any major correction from the current levels might present sellers an opportunity to sell GBPUSD as it remains under severe pressure for more losses in the near term.