GBP/USD retraces daily losses on soft US data
The GBP/USD pair caught fresh bids following the soft data from the U.S. and pared some of its daily losses. As of writing, the pair was trading at 1.2930, still down 0.15% on the day. Despite this recent move, the pair is staying in a tight 50-pip range between 1.29 and 1.2950.
Today's data showed that the personal income in the U.S. in March increased by 0.2%, missing the consensus of 0.3% and the personal spending remained unchanged (vs. +0.2%). The weak spending data was also reflected by the PCE index, which contracted by 0.2% in March (MoM) and eased to 1.8% on a yearly basis.
- US: Personal income increased $40.0 billion (0.2%) in March
Although the data missed the expectations, it wasn't necessarily a big surprise because the latest GDP growth data from the United States already had shown that the weak consumption had been the main reason why the economy was losing momentum in the first quarter of 2017.
Now investors are waiting for the second set of data, which includes manufacturing PMI numbers from Markit and ISM, and construction spending for March. However, the market reaction could remain limited as the trading volume struggles to pick up amid the Labor Day holiday.
Technical outlook
The pair faces the immediate hurdle at 1.2955/60 (Apr. 28 high/Oct. 4 high) ahead of 1.30 (psychological level) and 1.3060 (Sept. 28 high). On the flip side, supports align at 1.2900 (psychological level), 1.2840 (Apr. 27 low) and 1.2760 (Apr. 21 low).
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