GBP/USD quickly bounces off lows post-UK data, still below 1.34 handle
| • UK Q3 GDP at 0.4% q/q (in line), 1.7% y/y (better than expected).
• UK current account deficit shrinks less than expected.
• Reviving USD demand now seems to cap gains.
The GBP/USD pair quickly reversed a dip to 1.3360 area and jumped back to the top end of its daily trading range, albeit remained capped below the 1.3400 handle post-mixed UK economic releases.
The pair bounced off lows after the final UK Q3 GDP print matched original estimates and came in to show q-o-q growth of 0.4%, with the yearly growth rate rising to 1.7% as against 1.5% expected.
The upbeat GDP print, to some extent, got negated by a disappointment from the UK current account data, showing that deficit shrank less-than-expected to £22.8 billion in Q3 from previous quarter’s revised deficit of £25.8 billion.
Today’s mixed UK economic data failed to provide the required momentum to lift the pair beyond the 1.3400 handle. Moreover, a goodish pickup in the US Dollar demand further collaborated towards keeping a lid on any strong follow-through momentum.
Investors now look forward to the US economic docket, featuring the release of personal income/spending figures for November, along with the Fed's preferred inflation gauge - core PCE price index, Durable Goods Orders, New Home Sales and the Michigan consumer sentiment index, for some fresh impetus.
Technical levels to watch
A clear break through the mentioned barrier is likely to accelerate the up-move towards 1.3470-75 supply zone before the pair eventually darts towards reclaiming the key 1.35 psychological mark.
On the flip side, the 1.3330-25 region now seems to have emerged as immediate support, which if broken could drag the pair below 1.3300 handle towards its next support at 50-day SMA, near the 1.3275 region.
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.