Great Britain Pound (GBP) extended upside movement against the US Dollar (USD) on Friday, increasing the price of GBP/USD to more than 1.7160 ahead of Britain’s Gross Domestic Product (GDP) forecast report for the last three months. The pair also printed a fresh multi-year high on Friday despite the unexpected improvement in the US employment sector. The sentiment remains very positive due to Higher High and Higher Low in the recent wave.
As of this writing the pair is being traded near 1.7159. A hurdle may be noted around 1.7189, the 161.8% fib level of the recent move as demonstrated in the following chart. A break and daily closing above the 1.7189 resistance area could spur a renewed buying interest, opening doors for a fresh rally above the 1.7200 handle.
On the downside, the pair is likely to find a support around 1.7100, the intraday low of yesterday and psychological number ahead of 1.7000, the swing high of the last upside rally. The sentiment will remain bullish as far as the 1.6692 support area is intact.
UK GDP Estimate
On Monday, the National Institute of Economic and Social Research will release the UK GDP Estimated figure for the last three months. The GDP was seen standing at 0.9% last month, a higher actual outcome this time around will be seen as bullish for cable and vice versa.
US Employment Data
The nonfarm payrolls and jobless rate exceeded expectations according to a report released by the US labor department yesterday. The jobless rate slumped to a new multi-year low, hitting 6.1%. The data has spurred speculation regarding earlier than expected hike in the benchmark interest rate by the US Federal Reserve.
Considering the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy, a tight stop should however be placed around 1.7290 as demonstrated in the above chart.
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