GBP/USD muted reaction to upbeat US GDP
|The GBP/USD pair had a muted reaction to the preliminary release of US Q3 GDP print but maintained its bearish bias below mid-1.2100s.
The US economy recorded a strong growth during the third quarter of 2016 and expanded at 2.9% annualized pace marking the fastest growth rate in two and a half years. Market expectations were pointing to an annualized growth of 2.5% for the quarter.
Upbeat growth numbers lifted market expectations of an eventual Fed rate-hike action by the end of this year, with CME group's FedWatch Tool now pointing to 75.3% probability of such an action in December. Growing expectations of Fed action provided a minor boosted to the overall US Dollar Index and exerted some selling pressure around the GBP/USD pair, which maintained its offered tone amid ongoing worries over the economic consequences of the historic Brexit vote.
Further downslide, however, was limited and the pair remained stuck around 1.2140-50 region as market participants seemed reluctant to add on to their bullish US Dollar bets ahead of a weekend.
Later during NY session, the release of revised UoM Consumer Sentiment for October would now be looked upon for fresh impetus and short-term trading opportunities.
Technical levels to watch
From current levels, session low near 1.2120 seems to act as immediate support below which the pair is likely to accelerate the slide immediately towards weekly lows support near 1.2080 level before eventually dropping to flash-crash swing lows support near 1.2000 psychological mark.
Meanwhile, on the upside, any recovery attempts above 1.2160 level might now confront strong resistance near 1.2175, which if cleared should lift the pair back above 1.2200 handle towards testing its next major resistance near 1.2250 area.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.