GBP/USD headed to 1.3400 ahead of UK GDP?
- USD consolidates post-FOMC sell-off.
- Trades above all major DMAs.
- UK GDP on tap.
The GBP/USD pair prolonged its upward trajectory for the eighth straight session in Asia this Thursday, with the bulls now looking to conquer 1.34 handle ahead of the UK second estimate Q3 GDP.
GBP/USD: Thanksgiving holiday trading to remain supportive
With the greenback consolidating broadly near monthly lows, the GBP/USD pair has stalled its renewed upmove and entered a phase of bullish consolidation near six-week highs of 1.3329, as markets await fresh impetus from the UK Q3 GDP readout for the next push higher.
Wednesday’s rally seen in Cable can be mainly attributed to broad-based US dollar selling, in response to flattening of the Treasury yield curve and dovish FOMC minutes, which showed that weak inflation remains a key concern for the Fed to bring a halt to its rate hike outlook for the next year. Also, worse-than-expected US durable goods orders report also added to the weight on the buck.
Meanwhile, the UK’s Budget offered little help to the pound, while the OBR forecasts showing downward revision to the UK growth and inflation to peak in Q4 2017, also failed to stall the bullish tone seen behind the major.
Looking ahead, the pair awaits the UK growth figures and CBI realized sales data for fresh momentum, with light trading to prevail amid a Thanksgiving holiday in the US.
GBP/USD Technical Levels
Valeria Bednarik, Chief Analyst at FXStreet, noted: “The pair is trading within an ascendant channel clear in the 4 hours chart, as it keeps posting higher highs, although lower lows too, which leaves technical indicators with limited directional strength but within the positive territory. In the same chart, the price is well above a bullish 20 SMA, and extending below the 200 EMA, all of which favors additional gains ahead, now aiming to test 1.3336, October monthly high. The level could attract selling interest, yet a break above it should encourage bulls, resulting in further gains towards the 1.3400 level.”