Key Points
- The British Pound traded lower from the 1.3227 swing high against the US Dollar.
- There is a major bullish trend line forming with current support at 1.3120 on the hourly chart of GBPUSD.
- Recently in the UK, the GDP Estimate for Oct 2017(3M) was released by the National Institute of Economic and Social Research.
- The outcome was above the forecast of +0.4% as there was an increase of 0.5%.
GBPUSD Technical Analysis
The British Pound after trading above the 1.3200 handle found sellers near the 1.3227 swing high against the US Dollar. The GBPUSD pair started a downside wave, broke the 1.3200 and 1.3150 support levels and settled below the 21 hourly simple moving average.
At the moment, a major bullish trend line with current support at 1.3120 on the hourly chart of GBPUSD is holding losses and preventing further declines.
An initial resistance on the upside is near the 23.6% Fib retracement level of the last decline from the 1.3227 high to 1.3109 low. However, the most important resistance is near 1.3160-70 and the 50% Fib retracement level of the last decline from the 1.3227 high to 1.3109 low.
UK’s NIESR GDP Estimate
Recently in the UK, the GDP Estimate for Oct 2017(3M) was released by the National Institute of Economic and Social Research. The market was positioned for the GBP to increase around 0.4% in Oct 2017 (3M), similar to the last reading.
The actual result was above the forecast of +0.4% as there was an increase of 0.5%. It was also better than the last reading of +0.4%. The report stated that:
Our monthly estimates of GDP suggest that output expanded by 0.5 per cent in the three months to October, slightly stronger than the official outturn for the third quarter of 2017 which was 0.4 per cent. The monthly estimate is closely tracking our forecast for real GDP growth for the final quarter of this year which also stands at 0.5 per cent.
Overall, the GBPUSD pair must stay above the 1.3120-1.3100 support area if it has to move higher in the near term.
