GBP/USD supported at 1.41 as attention shifts to US growth and inflation

• The risk-on sentiment is supporting the greenback on Tuesday.
• The US growth and inflation data on Wednesday will likely lead to some volatility in the GBP/USD. 
• End of the month plus end of quarter profit-taking weigh on the pound.

The GBP/USD is currently trading at about 1.4157 down 0.52% on Tuesday so far as the end of the month plus end of the first quarter profit-taking combined with the Financial Policy Committee of the Bank of England considering increasing countercyclical capital buffer for banks at the March meeting put pressure on the Sterling.

Compounding the GBP/USD selling pressure is the risk-on sentiment on Wall Street as fears of a trade war between the US and China are receding, bolstering the US Dollar in the process.

On Wednesday, the focus will shift to the US growth and inflation numbers with the Gross Domestic Product (GDP) and the Personal Consumption Expenditures Prices (PCE) macroeconomic data which will  be closely watched by the Fed in order to adjust the pace of the US rate hikes. A strong deviation in the US data could potentially lead to volatility in the Cable as the Fed is looking for positive growth according to analysts.  

In the UK, the GDP data is scheduled on Thursday and is also an indicator which is closely looked at by the Bank of England.  

GBP/USD daily chart

The sellers prevented the market from breaking above 1.4244 on Tuesday and were able to bring the market below the low made on Thursday as the GBP/USD has now regained Monday’s range. It is still unclear at this stage what the market intends to do next as investors are likely waiting for  Wednesday's US GDP and PCE macroeconomic data and Thursday´s UK GDP. 

GBP/USD 4-hour chart

The bulls found support at the 1.4100 figure and the 50-period simple moving average. Forming a strong bottom with the lows made on March 22 and 23. The 1.41 handle is seen as support along with the 1.40 figure, 100-pip below. The market is now testing a resistance at 1.4160 previous supply/demand level. The next key resistance is the swing high at 1.4250