After staying in a horizontal range for the past few days, the GBP/USD pair was finally able to make a decisive move to break out of this range. After refreshing its highest level since October at 1.2914, the pair eased back a little but is staying above 1.29. As of writing, the pair was trading at 1.2905, up 0.45% on the day.
There are a few factors that may have helped the pair gain the bullish momentum. First of all, the US Dollar Index hasn’t been able to make a satisfying rise above the 99 handle throughout the week and today was no different. Additionally, the sharp fall witnessed in the EUR/GBP pair following Draghi’s press conference helped the cable gather strength against its competitors. Moreover, by breaking out of its recent range, the pair may have triggered a technical buying wave as well.
Tomorrow’s economic calendar features GDP growth data from the UK and the US. The GDP in the UK is expected to grow at a slower pace in the first quarter (QoQ) of the year, while the annualized GDP growth rate in the U.S. for Q1 is forecasted to fall to 1.3% from 2.1%.
With a daily close above 1.29, the pair could target 1.2960 (Oct. 4 high) ahead of 1.30 (psychological level). To the downside, supports are located at 1.2840 (daily low), 1.2760 (Apr. 21 low) and 1.2700 (psychological level).