UK Q4 GDP forecasts rebounded, but the pound continued its weak adjustment against the dollar.
2026-02-12 14:28:43
On Thursday morning in Europe, GBP/USD rebounded to around 1.3630, reversing a two-day losing streak. The pound's short-term performance improved, mainly supported by market expectations for UK economic data.
The UK's preliminary fourth-quarter GDP figures are the focus of market attention. The market expects the UK economy to grow by 0.2% quarter-on-quarter, higher than the previous 0.1%. Better-than-expected data would further alleviate concerns about an economic slowdown, providing fundamental support for the pound and potentially pushing the exchange rate to challenge recent highs.
Conversely, if growth falls short of expectations, it could weaken market confidence and put renewed pressure on the pound. Meanwhile, the fundamentals supporting the US dollar remain intact.
The U.S. Labor Department's January non-farm payrolls report was robust, with 130,000 new jobs added, exceeding market expectations of 70,000; the unemployment rate fell from 4.4% to 4.3%. The strong jobs data prompted the market to lower its bets on a Federal Reserve rate cut in March, thus supporting the dollar.
Therefore, the current GBP/USD exchange rate is characterized by a fundamental game: on the one hand, UK economic data may bring positive expectations, and on the other hand, US employment performance strengthens the resilience of the US dollar, which limits the upside potential of the exchange rate.
From a daily chart perspective, GBP/USD remains within an upward trend framework. The price is firmly above the rising 100-day exponential moving average (EMA) at 1.3447, indicating a continued bullish medium-term trend. The upward slope of the EMA provides dynamic support for pullbacks, suggesting that bargain hunters remain in the market.
The Relative Strength Index (RSI) is currently at 53.6, having rebounded and held above 50. Momentum indicators show that bullish forces are gradually recovering, but it has not yet entered the overbought zone, meaning there is still room for upward momentum.
The Bollinger Bands chart shows that the price is trading above the middle band (1.3618), and the Bollinger Bands are showing signs of widening, indicating increased volatility and a potential continuation of the trend. If the bullish momentum continues, the exchange rate may test the February 11 high of 1.3713.
If the breakout is successful, the next target could be the upper Bollinger Band area at 1.3873. In terms of candlestick patterns, no clear trend reversal signal has appeared during the recent pullback, with significant buying support below. The structure still exhibits a "gradually rising highs and lows" characteristic, maintaining a bullish bias.
However, if the daily closing price falls below the lower Bollinger Band or breaks below the 100-day moving average, it will weaken the current bullish structure and could trigger a deeper pullback. Overall, the GBP/USD daily trend remains bullish, and as long as key moving average support holds, the structural advantage still leans towards the upward direction.
Editor's Note:
The core variable in the current movement of the pound lies in the veracity of economic data. If UK GDP data shows growth as expected or even exceeding expectations, it will strengthen market confidence in the economic recovery and become a significant catalyst for a further rebound in the pound.
However, the resilient US employment data provided support for the dollar. The dollar has not entered a clear period of weakness, meaning the pound's rise may be more of a gradual, oscillating upward movement rather than a one-sided surge.
In summary, as long as the overall trend remains intact, the medium-term structure of the British pound remains relatively strong, but its upside potential may be constrained by fundamental factors affecting the US dollar. Attention should be paid to changes in momentum after data releases to confirm the direction for the next phase.
The UK's preliminary fourth-quarter GDP figures are the focus of market attention. The market expects the UK economy to grow by 0.2% quarter-on-quarter, higher than the previous 0.1%. Better-than-expected data would further alleviate concerns about an economic slowdown, providing fundamental support for the pound and potentially pushing the exchange rate to challenge recent highs.
Conversely, if growth falls short of expectations, it could weaken market confidence and put renewed pressure on the pound. Meanwhile, the fundamentals supporting the US dollar remain intact.
The U.S. Labor Department's January non-farm payrolls report was robust, with 130,000 new jobs added, exceeding market expectations of 70,000; the unemployment rate fell from 4.4% to 4.3%. The strong jobs data prompted the market to lower its bets on a Federal Reserve rate cut in March, thus supporting the dollar.
Therefore, the current GBP/USD exchange rate is characterized by a fundamental game: on the one hand, UK economic data may bring positive expectations, and on the other hand, US employment performance strengthens the resilience of the US dollar, which limits the upside potential of the exchange rate.
From a daily chart perspective, GBP/USD remains within an upward trend framework. The price is firmly above the rising 100-day exponential moving average (EMA) at 1.3447, indicating a continued bullish medium-term trend. The upward slope of the EMA provides dynamic support for pullbacks, suggesting that bargain hunters remain in the market.
The Relative Strength Index (RSI) is currently at 53.6, having rebounded and held above 50. Momentum indicators show that bullish forces are gradually recovering, but it has not yet entered the overbought zone, meaning there is still room for upward momentum.
The Bollinger Bands chart shows that the price is trading above the middle band (1.3618), and the Bollinger Bands are showing signs of widening, indicating increased volatility and a potential continuation of the trend. If the bullish momentum continues, the exchange rate may test the February 11 high of 1.3713.
If the breakout is successful, the next target could be the upper Bollinger Band area at 1.3873. In terms of candlestick patterns, no clear trend reversal signal has appeared during the recent pullback, with significant buying support below. The structure still exhibits a "gradually rising highs and lows" characteristic, maintaining a bullish bias.
However, if the daily closing price falls below the lower Bollinger Band or breaks below the 100-day moving average, it will weaken the current bullish structure and could trigger a deeper pullback. Overall, the GBP/USD daily trend remains bullish, and as long as key moving average support holds, the structural advantage still leans towards the upward direction.
Editor's Note:
The core variable in the current movement of the pound lies in the veracity of economic data. If UK GDP data shows growth as expected or even exceeding expectations, it will strengthen market confidence in the economic recovery and become a significant catalyst for a further rebound in the pound.
However, the resilient US employment data provided support for the dollar. The dollar has not entered a clear period of weakness, meaning the pound's rise may be more of a gradual, oscillating upward movement rather than a one-sided surge.
In summary, as long as the overall trend remains intact, the medium-term structure of the British pound remains relatively strong, but its upside potential may be constrained by fundamental factors affecting the US dollar. Attention should be paid to changes in momentum after data releases to confirm the direction for the next phase.
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