GBPUSD – 1.2240 Holds Key For British Pound; UK GDP Next27 October, 2016 by Aayush Jindal in GBPUSD, Market Analysis, Technical Analysis
GBPUSD – 1.2240 Holds Key For British Pound; UK GDP Next
- The British Pound recovered recently to trade above 1.2150 against the US Dollar.
- There is a crucial resistance formed near 1.2220-40, as a couple of bearish trend lines are positioned.
- Today, the UK preliminary Gross Domestic Product will be released by the National Statistics, which is forecasted to increase by 0.3% in Q3 2016.
- The yearly change for the UK GDP is forecasted to grow by 2.1%.
GBPUSD Technical Analysis
The British Pound mostly struggled against the US Dollar during the past few days. However, if the GBPUSD pair manages to break the 1.2240 resistance, there are chances of further gains.
There are a few important bearish trend lines aligned at 1.2240 on the 4-hours chart, which are acting as a hurdle for the buyers. Moreover, the 61.8% Fib retracement level of the last decline from the 1.2339 high to 1.2083 low is also positioned near it.
So, it looks like it won’t be easy for the buyers to take the pair above the highlighted resistance. On the downside, the 1.2150 level may act as a support, as there is also a bullish trend line positioned around the same level.
UK Gross Domestic Product (GDP)
Today the UK will see a major release, as the Gross Domestic Product will be reported by the National Statistics. The market is waiting for the total value of all goods and services produced by the UK to increase by 0.3% in Q3 2016 (preliminary), compared with the previous quarter.
In terms of the yearly change, the preliminary GDP is forecasted to grow by 2.1% in Q3 2016, compared with the same quarter a year ago. If there is any miss in the actual result, then we can witness an increase in selling pressure for the British Pound.
US Initial Jobless Claims
The US will be waiting for the Initial Jobless Claims release by the US Department of Labor today. The forecast is slated for a decline in the claims from the last reading of 260K to 255K. In an another release, the Durable Goods Orders will be reported by the US Census Bureau, which are forecasted to increase by 0.1% in Sep 2016. It would be interesting to see how the greenback reacts post the stated releases.