UK GDP Growth Weaker Than Expected
UK GDP growth was confirmed at 0.5% in the second half of 2018, marking its lowest semi-annual growth rate for seven years. According to the Office of National Statistics which release the data, the overall data reflected the underlying trend is “still one of slowing real GDP growth” with Q2 GDP growth printing just 0.4%, the weakest quarterly growth since 2012. Annual Q2 GDP growth was only 1.2%, missing expectations of 1.3%.
UK Current Account Deficit Widens in Q2
Separate data showed that the UK’s current account deficit widened in Q2 by -20.317 billion GBP, more than the expected -19.40 billion GBP. Overall, the data does a poor reading for GBP bulls who were left disappointed this week when the GBP rally failed. The BoE has highlighted ongoing Brexit uncertainty as a cause for concern and as the deadline for a deal approaches, it seems that this uncertainty is starting to feed into data weakness.
The rally in GBPUSD took price back up into a retest of the broken rising trend line from 2016 which has acted a resistance. Price is now on course to print a second bearish pin bar candle, forming a “tweezer top” reversal pattern at the level which puts focus on a move back down to the 1.2667 2018 low.