GBP/USD Forecast: holding on to gains, still bullish
|The GBP/USD pair recovered some ground in Asia, extending its rally up to 1.3233, but retreating after London's opening, in spite of positive UK data. The preliminary reading of the Q2 GDP came in as expected at 0.6%, with the annual reading also unchanged at 2.2%. Total business investment in the same period beat expectations printing 0.5% against the -0.8% expected, while compared to the second quarter of 2015, investment fell by 0.8% against expectations of a 1.4% drop.
The pair holds above the 1.3200 level ahead of US Q2 GDP first revision and Janet Yellen's speech in Jackson Hole, and the 4 hours chart shows that the price is currently holding above its 200 EMA and a bullish 20 SMA, both converging around the figure. Technical indicators in the same chart hold above their mid-lines, but lack directional strength, failing to provide clear bullish signals.
Nevertheless, if the price advances beyond the mentioned daily high, the rally can extend up to 13270, while beyond this level, the next probable bullish target is 1.3320, the 23.6% retracement of its Brexit slump.
Below 1.3160 on the other hand, the risk turns towards the downside, with scope to extend down to 1.3100. Further slides below this last seem unlikely, but if the dollar gathers enough momentum, the decline can extend to 1.3050.
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