GBP/USD Hits Four-Month High Following GDP Growth News

FXOpen

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.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

Latest articles

What Is a Global Macro Strategy, and How Do Traders Use It in Trading?
Trader’s Tools

What Is a Global Macro Strategy, and How Do Traders Use It in Trading?

A global macro strategy is a comprehensive investment and trading approach that includes analysis of economic, political, and global trends to make decisions. This article delves into the core components, analytical tools, and practical applications of global macro strategy, providing

Commodity Currencies in Stable Ranges: Should We Expect a Breakout?
Forex Analysis

Commodity Currencies in Stable Ranges: Should We Expect a Breakout?

The currency pairs AUD/USD and USD/CAD, unlike the pairs with the Euro, Yen, and Sterling, continue to demonstrate long-term stability. These pairs have been trading in narrow price corridors for several months. Given the weakening of the dollar

Commodities

Analysis of XAU/USD: Gold Price Sets Historical Record

As the XAU/USD chart shows, on 16th July, the gold price rose above $2460 for the first time in history. The bullish sentiment is driven by:

→ Anticipation of Fed rate cuts, as the appeal of non-yielding bullion generally increases

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.