Daily Forex Market Preview, 30/04/2018
The U.S. dollar remained flat on Friday despite some bullish fundamentals. The U.S. preliminary GDP report beat forecasts to rise 2.3% on the quarter. Economists’ forecast a 2.0% increase during the quarter. Despite the beat on the forecasts, the quarterly GDP was slower than the 2.9% increase seen previously.
Data from the UK disappointed as the UK’s GDP was seen rising just 0.1% in the first three months of the year. The British pound extended losses on the news release.
Looking ahead, the markets get off a busy start. The European trading session will see the release of the German retail sales report. Economists forecast that retail sales rebounded in March, rising 0.8% on the month. This would potentially offset the 0.7% decline seen the month before. Germany’s preliminary inflation report is also due to be released, and the data is expected to show a 0.1% decline in consumer prices following a 0.4% increase.
The NY trading session will see the release of the core PCE price index data. The Fed’s preferred gauge of inflation is forecast to rise 0.2% on the month, rising at the same pace as the month before. Personal spending and income data is expected to rise 0.4%. The U.S. pending home sales report is forecast to rise at a slower pace of 0.6% on the month after a 3.1% increase seen the month before.
GBPUSD 30-04-2018 Intra-day analysis
GBPUSD (1.3780): The British pound posted strong losses on the day on Friday following a weaker than expected preliminary GDP report and a stronger than expected GDP data from the United States. The breakout below the 1.3900 level of support pushed the pound sterling lower to test weekly lows of 1.3770, briefly falling below lows from 8th March. In the near term, we expect price action to post a modest recovery. Any gains are likely to be limited to the 1.3900 level where resistance could be established. This is validated by the hidden bullish divergence seen on the 4-hour Stochastics indicator.
