Today, the UK Office for National Statistics published data showing an increase in GDP.

According to Forex Factory:

→ A month ago, GDP was at 0.0% month-on-month;

→ This month, analysts had forecasted growth of 0.2%;

→ Actual growth reached 0.4%.

This news should be welcomed by the Labour Party, which has come into power with ambitious plans for economic development.

On the other hand, how will the Bank of England respond? The GDP growth might provide an argument for maintaining high interest rates for a longer period to ensure that fears of a new inflationary surge do not materialise.

As Bloomberg reports, markets currently assess the likelihood of a rate cut at the next Bank of England meeting on 1 August at just under 50%.

Financial markets reacted with a rise in the sterling's value against other currencies. The GBP/USD rate is at its highest level since early March.

Will the Growth Continue?

The GBP/USD chart shows that the price is in a rally, having risen by 1.7% since the beginning of July.

Technical Analysis of the GBP/USD Chart Today:

→ The price is moving within an ascending channel that started in early July, with the 1.27755 level having shifted from resistance to support.

→ The price has surpassed the June high at 1.28600 and is heading towards the year's high at 1.28930.

→ Support may come from the lower boundary of the ascending channel.

→ The strength of the bullish trend is indicated by the size of the B→C retracement. It is approximately at the 0.382 Fibonacci level of the A→B impulse, which broke the 1.27000 resistance.

If market sentiment remains unchanged, the bulls might attempt to surpass the year's high. However, one should also consider the news from the US. Today, inflation news is expected at 15:30 (GMT+3), which could significantly influence the current GBP/USD exchange rate dynamics.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.