GBP/USD outlook: Bulls remain in play after markets digested UK GDP data
GBP/USD
Cable remains firm and probing through psychological 1.2500 barrier in early European trading on Thursday, as markets digested UK data.
UK economic growth was flat in February, against expectations for a minimal expansion by 0.1%, but immediate negative impact was offset by upward revision of January’s figure to 0.4% from 0.3%, which offered fresh support after the pound was lifted by Wednesday’s US CPI below expectations.
The action is underpinned by rising positive momentum and moving averages in full bullish setup on daily chart and extending strong advance from past two days.
Bulls eye key barrier at 1.2525 (2023 high, posted on Apr 4), break of which would open way towards net target at 1.2759 (Fibo 61.8% of 1.4249/1.0348 downtrend).
Confirmation of higher low at 1.2343 (Apr 10) adds to bullish outlook, though bulls may face headwinds at 1.2525 target as stochastic is about to enter overbought territory on daily chart.
Potential dips are expected to offer better buying opportunities and should be ideally contained by rising 10DMA (1.2434).
Caution on sustained break below rising 20DMA (1.2346) which would sideline immediate bulls.
Res: 1.2525; 1.2600; 1.2694; 1.2759.
Sup: 1.2476; 1.2443; 1.2346; 1.2274.
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Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
