GBP/USD Bounces Off Key Support to Top 1.3100 After UK GDP

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The GBP/USD currency pair on Thursday bounced off the key support zone at around 1.3062 to surge above 1.3100 after Wednesday’s UK GDP data. The currency pair continues to trade within a consolidative wedge with a flat base and a declining top.

The currency pair is currently pinned just above the 200-hour SMA while the 100-hour SMA is a few pips below. It continues to surge towards the overbought level of the 14-hour RSI in the 60-min chart.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of a relatively busy period in both markets. On Monday, the UK’s BRC like-for-like retail sales for July missed the expected (YoY) change of 7.6% with 4.3%. Claimant count change soared to 94.4k in July up from -28.1k in the previous period. The market was expecting a claimant count of 10k. Average earnings also came short of expectations while the ILO unemployment rate beat 4.2% with 3.9%.

On Wednesday, The UK’s preliminary (QoQ) GDP for Q2 beat -20.5% with -20.4%. The (YoY) equivalent beat -22.4% with -21.7% while the GDP for June outperformed 8% (MoM) with 8.7%. The UK Manufacturing Production for June beat the (MoM) and (YoY) expectations of 10% and -15%, respectively with 11% and -14.6%. Industrial Production for June also outshone the (MoM) and (YoY) expectations of 9.2% and -12.8%, respectively with 9.3% and -12.5%. 

In the US, the initial and continuing jobless claims beat the expectations of 1.12M and 15.898M, respectively with 963k and 15.486M claims. Earlier in the week, the US CPI and PPI, both ex-food and energy outperformed expectations.

GBP/USD Technical Analysis (the 60-min Chart)

Technically, the GBP/USD currency pair appears to be trading within a consolidative wedge in the 60-min chart. The flat base and declining top indicate a slight short-term bearish bias in the market sentiment. The pair is approaching overbought levels after Thursday’s rebound.

The bulls will be targeting short-term profits at around 1.3134 or higher at 1.3181. On the other hand, the bears will target short-term pullback profits at around 1.3063 or lower at 1.3014.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair appears to be facing strong resistance around the 1.3150 level. The pair appears to have recently completed an inverted head-and-shoulders pattern, which triggered a sharp rally. The recent pullback pushed it off oversold levels of the 14-day RSI.

The bulls will be targeting long-term rebound profits at around 1.3330 or higher at 1.3519. On the other hand, the bears will look to pounce at around 1.2897 or lower at 1.2715.

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