- The pound is back against the dollar but moderately.
- GBP / USD remains around 1.4150, with a bearish bias.
GBP / USD is falling on Friday, after having approached 1.4200. The price reached the low of the day at 1.4140. For hours it has been operating in the range between 1.4170 and 1.4150, with a downward bias due to a strengthening of the dollar in the market.
Despite the drop against the dollar, the pound rose significantly against the euro. In turn, the decline in GBP / USD for now has been more moderate than that of EUR / USD and other crosses such as AUD / USD and NZD / USD.
The strength of the pound was noticed despite the data that was known. The UK’s monthly GDP report showed that the economy expanded 2.3% in April, compared to consensus estimates that point to growth of 2.4%. However, this was better than the 2.1% recorded in March. On the other hand, UK manufacturing and industrial production data indicated that the recovery of the British industrial sector faltered in April. In fact, manufacturing fell 0.3% month-on-month, while total industrial production was 1.3% lower than the previous month.
For its part, The dollar rallied even as Treasury yields stabilized in the zone of lows in months. Now the focus is on what the Federal Reserve can do next week.
Follow the range
The 1.4200 zone remains a key resistance, which if broken would point to further strength for the pound, enabling further raises. But for now the GBP / USD can’t handle that level. To the downside, 1.4100 is a support to take into account and a break below would point to greater vulnerability.