GBP/USD sits at half-yearly tops ahead of UK GDP

The GBP/USD pair retreats slightly from six-month tops reached at 1.2916 last hour, although remains slightly bid above 1.29 handle, as we progress towards the European opening bells.

Cable enters a consolidative mode, as the bulls take a breather and await fresh impetus from the UK prelim GDP report, which will be reported at 8.30GMT later today. Markets are expecting the UK Q1 growth to have slowed its pace of expansion to 0.4% q/q from the previous quarter’s 0.7% reading.

The spot could take a beating on a softer GDP print and test 1.28 handle, as investors would take profits off the table after the recent upsurge. On an upside surprise, the prices are likely to rally hard in a bid to conquer 1.30 handle, extending the ongoing unwinding of GBP shorts.

However, the extent of the move in cable would also depend on the upcoming US Q1 GDP report, followed by Chicago PMI and revised consumer sentiment data.

GBP/USD Levels to consider            

A break above 1.2916 (6-month highs) could lift the pair above 1.2950 (psychological levels), beyond which a test of 1.2948 (flash crash high) is imminent. Conversely, a break below 1.2859 (5-DMA), leading to a subsequent break below 1.2836 (10-DMA) is likely to drag the pair towards testing its next support near 1.2800 (round figure).