The British pound against the US dollar (GBP/USD) remains steady after losing earlier gains. New data shows the UK economy shrank more than expected in April.
The Office for National Statistics reported a 0.3% monthly drop, worse than the predicted 0.1% decline. This is the biggest fall in 18 months, signaling a weak second quarter ahead. The services sector fell by 0.4%, and manufacturing output dropped by 0.9%.
The UK economy had a strong first quarter as companies rushed to avoid tariffs. But now, growth is slowing due to job losses—about 250,000 jobs were cut after tax and wage hikes.
Exports to the US fell by £2 billion in April, and consumers are spending less after a strong start to the year. Higher energy bills and increased payroll taxes also weighed on businesses and households.
Meanwhile, the US dollar is near a seven-week low. Uncertainty around the US-China trade deal and looming tariff deadlines is causing concern. Inflation has not yet shown major effects from tariffs, but the US job market is slowing. Upcoming US jobless claims data is expected to show 240,000 new jobs, and weaker claims could further weaken the dollar.
GBP/USD Technical Outlook
The GBP/USD pair has struggled to rise above 1.36. The long-term trend is upward, but momentum is fading, indicated by a bearish RSI divergence. Support lies at 1.3450; a break below this could lead to lower lows. To break out of the current range, buyers need to push above 1.36, targeting 1.37 and then 1.3750, levels last seen in 2022.
Oil Market Update: Prices Ease After Gains
Oil prices fell slightly after rising more than 5% the previous day. Traders are watching tensions in the Middle East and developments in US-China trade talks. The US ordered nonessential staff to leave parts of the Middle East due to security concerns before Iran nuclear talks in Oman this weekend.
The US and China agreed to return tariffs to levels set in Geneva: 55% on Chinese imports to the US (down from 30% and 25% previously) and 10% on US imports to China. However, details are limited. Former President Trump plans to send letters soon about unilateral tariff rates, adding caution. High tariffs could slow economic growth and reduce oil demand.
Oil Technical Analysis
Oil prices have recovered from $55.30, breaking above $65.00 and are trying to surpass the 200-day moving average (SMA). The RSI suggests room for further gains as it is not yet overbought. Closing above the 200 SMA could push prices toward $70.00 and then $72.00, the April high.
Support is at $65.00, near lows from March and September, and along a falling trendline from the start of the year. A drop below $65.00 and then $64.00 could bring $60.00 into focus.
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