UK GDP preview: What to expect of GBP/USD?

By FXStreet FXStreet (Mumbai) – The GBP/USD pair is trading finds itself stuck in the falling channel ahead of the UK third quarter GDP figure due for release later today.

UK economy maintained momentum in Q3

The consensus estimates call for a GDP print of 0.6% quarter-on-quarter, compared to the previous quarter’s 0.7%. The services component is likely to have gained 0.2% m/m in August. Despite the slight decline expected, the economists believe the slack in the economy is being worked-off and a GDP print at or above 0.6% keeps the Bank of England on track to raise rates in Q2 2016.

The markets may be in for a positive surprise, since the retail sales released last week had beat expectations by a big margin.

GBP/USD Technical Levels

The spot is currently trading around 1.5345, with an immediate support and resistance located at 1.5341 (hourly 50-MA) and 1.5356 (falling trendline resistance). A UK GDP figure higher than 0.7% could push the pair above 1.5373 (50-DMA) and towards hourly 200-MA located at 1.5421. On the other hand, a GDP figure below 0.65 could trigger a bearish break below 1.5332 (200-DMA) and may push the pair to 1.5246 (Oct 13 close).
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Source:: FX Street