GBP/USD Surges To Retest Weekly Highs After UK Data

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The GBP/USD currency pair rallied on Thursday to top 1.2875 after bottoming at around 1.2827 following the latest round of UK data. The currency pair is trading in a consolidative sideways movement and is now on course to complete the 1,2,3,4,5 impulse wave pattern.

This signals a short-term bull-run given the currency pair’s current position within the sideways channel. The pair now trades just above the 100-hour and the 200-hour SMA lines which again indicates a bullish pressure.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of a busy period in both the Uk and the US markets. While Brexit and US-China trade wars appear to have taken a back seat over the last couple of weeks, a series of economic data released this week could tilt the direction of the pair in the coming days.

The UK non-EU trade balance for September missed expectations of GBP-2.5B with GBP-4.032. Industrial Production also missed the expected change of -1.3% with -1.4% (YoY). On the other hand, the preliminary Gross Domestic Product for Q3 missed the expectation of 1.1% (QoQ) with 1.0% while manufacturing production for September missed the expected change of -1.6% (YoY) with -1.8%.

The UK Consumer Price Index, PPI core output, and retail price index all missed expectations for September as did the PPI input and the DCLG House Price Index. 

The US Consumer Price Index (YoY) for October beat the expectations of 1.7% with 1.8% but the CPI ex-food and energy missed the expectation of 2.4% (YoY) with 2.3%.

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

Technically, the GBP/USD currency pair appears to be trading in a slightly bearish channel but has recently made a bullish movement as it looks to complete the 1,2,3,4,5 impulse wave. The currency pair is now on the verge of entering overbought levels of the RSI indicator on the 60-min chart following today’s rebound.

Therefore, the bears will be targeting short-term profits at around 1.2827, 1.2773 or lower at 1.2726. On the other hand, the bulls will hope for a continuation of the bullish run towards 1.2917, 1.2969 or higher at 1.3010.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair appears to be trading in a descending wedge coming off a sideways channel. The currency pair has recently made a bullish rebound off the 1.2000 level and now targets movement above the 1.3000 key level.

However, after venturing into the overbought levels of the RSI Indicator on the daily chart recently, a pullback could emerge in the coming weeks. The bears will target long-term profits at around 1.2704, 1.2609, or lower at 1.2490. On the other hand, the bulls will target profits at 1.3020, 1.3123, or higher at 1.3257.

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