GBP/USD: strong resistance ahead
British pound enjoyed a rebound for a second week in a row. The cable remains supported by the overall US dollar weakness. What’s more, rather hawkish MPC minutes released on Wednesday provided the buyers with an additional stimulus.
However, beware of the large sell orders clustered in the 1.5150/1.5200 region. This is where the trend resistance now lies. Break higher would open the way for a rebound to 1.5500, but it’s clearly too early to discuss a bullish reversal.
Next week we’ll be watching the UK first-quarter GDP on Tuesday. Services and Manufacturing PMI indices showed a rebound over the past months, so some economists expect growth to accelerate from 0.6% in the fourth quarter of the past year. However, there is always room for bearish surprises.
GDP figures matter a lot one week before the May 7 election: strong reading could support Prime Minister David Cameron and his Conservative Party and decrease the market uncertainty. Polls remain unchanged for now: both Conservative and Labour parties were stuck on roughly 34% each.