GBPUSD Before US GDP & PCE

The fundamental picture is changing. Last Fridays US Composite Flash PMI reading fell to a 17-month low at 50.4. Whilst still being above 50 implying expansion to come, it indicates that US GDP growth for Q1 may be just over 0.6%, rather than Q4 2024 GDP growth of 2.3% currently expected. Thursday's US GDP release if for Q4 2024, so we may see a strong release again. But what does this mean for GBPUSD?

Aforementioned resistance at 1.2670 was tested last week & has so far contained price. If US GDP is strong (& US Personal Consumption Expenditure [PCE]) also firm GBPUSD can move lower to test support at 1.2395. However, with a possible slowdown coming for the US economy it is possible for this support to remain intact & encourage another wave of GBPUSD strength. If this is the case, resistance is at 1.2715 & 1.2940. If/when one or both of these levels remains intact price can then resume its bear sequence from the 1.3434 high with targets at 1.1895 & even 1.1385. These targets will change as the correction levels change.

To precis, price is in a corrective phase. This can continue within a range of 1.2395 & 1.2715. If/when the bear sequence resumes price can trade below 1.2000. If price trades above 1.2940 the analysis will have to be changed to allow for more strength.

Lets see.