Forex: GBP/USD continues uptrend on UK GDP data

on Nov 27, 2013
Updated: Oct 21, 2019
Listen Wednesday, November 27th:_ The GBP/USD yesterday initially fell to a low of 1.6137 and then rebounded to a high at 1.6218, so breaking firmly through the 1.6200 psychological level.

The Second Estimate of UK GDP for the third quarter q/q was released today, showing that the UK’s economic growth in the period was supported by the most rapid rise in consumer spending in the past three years but that domestic demand has only partially offset a decline in exports.
The data will likely deepen concerns as to the sustainability of that economic growth. Exports fell by 2.4 percent in the quarter, the biggest contraction in the past two years, and along with rising imports took 0.9 percent off the GDP reading. The economy expanded by just 0.8 percent in the July-September period, confirming the preliminary estimate, and with the largest being consumer spending, also up 0.8 percent.

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The Bank of England has previously expressed its concerns about the stability of growth based on consumer spending without attendant growth in export income.
Following the release the GBP/USD initially fell by 0.2 percent to 1.6204 before rising sharply to an ongoing intraday high at 1.6291 – its highest point since 2 January. The price also broke above the descending trendline passing through the tops since the beginning of October and surpassed the 1 October peak of 1.6259, so continuing the uptrend from the 9 July low of 1.4812.

Currently, the pair is trading at 1.6286.
In other UK releases, Preliminary Business Investment q/q grew by 1.4 percent in Q3, disappointing analyst expectations for 2.3 percent. The reading was nonetheless the first rise in the last four quarters, with the prior 0.9 percent increase having been revised down to a 2.7 percent contraction. On an annualised basis, the indicator dropped 6.3 percent in Q3.

The CBI UK Realized Sales Index for November is due out at 11.00 UTC and is expected to jump to 12 points from the prior 2.0.
All eyes will now be on the US Unemployment Insurance Initial Claims report for last week and US Core Durable Goods Orders m/m for October, both due out at 13.30 UTC and both expected to show an increase.
**Today’s resistances: 1.6225, 1.6265 and 1.6315.**
**Today’s supports: 1.6200, 1.6160 and 1.6115.**
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GBP UK Forex