The GBP/USD pair built on to its break-out momentum and moved higher for the fourth consecutive day, rising to the highest level since late-Sept. near mid-1.2900s.
After initially wobbling around the 1.2900 handle, a fresh wave of US Dollar selling interest helped the pair to shrug-off dismal UK GDP figures and has been sole driver of the pair’s up-move in the past hour of so. In fact, the key US Dollar Index has now dropped back closer to 5-month lows touched earlier this week, despite of a mild up-tick in the US treasury bond yields.
Earlier today, data released from the UK showed the economy is expected to register a quarterly growth of 0.3% during the first quarter of 2017, down from 0.7% reported in the previous quarter. Meanwhile, the yearly growth rate is expected to tick higher to 2.1% from previous 1.9%.
Investors now look forward to the advance release of US GDP number for some immediate respite for the US Dollar bulls. Against the backdrop of recent disappointment from the US macro data, disappointing growth numbers should continue to weigh on the greenback and assist the pair to extend its near-term upward trajectory. Apart from the quarterly GDP print, the US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment.
Technical levels to watch
From current levels, immediate resistance is pegged near 1.2960-70 zone, above which a fresh leg of up-move has the potential to lift the pair beyond the key 1.30 psychological mark towards testing its next major hurdle near 1.3070-80 area in the near-term.
On the flip side, retracement below the 1.2900 handle, leading to a subsequent drop below 1.2885 level, might continued to find some fresh buying interest at a previous resistance, now turned support, near 1.2860-50 zone. Only a decisive break below mid-1.2800s might prompt additional profit taking and negate further bullish bias.