Market Overview

Post-UK GDP Bullish GBP/USD Momentum Seems To Be Losing Steam

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The British Pound powered higher on Wednesday on the back of stronger-than-expected UK economic growth figures. According to the preliminary estimate, released by the Office for National Statistics, UK GDP expanded 0.4 percent during the third-quarter of 2017, with annualized rate ticking higher to 1.5 percent and reaffirmed prospects for November BoE rate hike action. 

The GBP/USD pair surged through the 1.3225-30 supply zone and touched a 7-day high level of 1.3279 during Asian session on Thursday, although it lacked any strong follow-through momentum. Against the backdrop of Wednesday's stronger durable goods orders and new home sales data from the US, optimism over Trump's drive to overhaul the US tax code and capped speculations that the next Fed Chair could be more hawkish now seem to have put a lid on any further up-move for the major. 

Today's UK economic docket lacks any major market-moving economic releases and hence, traders would take cues from second-tier US data - weekly jobless claims, goods trade balance prelim wholesale inventories and pending home sales, due later during the North American session. 

From a technical perspective, the pair is now struggling to move past the 38.2 percent Fibonacci retracement level of 1.3657-1.3027 downslide and hence, it would be prudent to wait for a decisive breakthrough past this hurdle before positioning for any additional near-term gains. Above the mentioned hurdle, the pair is likely to surpass the 1.3300 handle and aim toward retesting the 1.3335-40 barrier, also coinciding with the 50 percent Fibonacci retracement level. 

On the flip side, previous strong resistance, near the 1.3230 region, now becomes an immediate strong support to defend, which if broken could drag the pair back below the 1.3200 handle toward the 23.6 percent Fibonacci retracement level support near the 1.3175-70 zone. Some follow-through weakness could further get extended back toward the 1.3125 horizontal support en-route to the 1.3100 handle and the 100-day SMA support near the 1.3060-55 region.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: FXStreetEurozone Forex Markets

 

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