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

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 27, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The GBP/USD pair is hovering around 1.5087 (67.8% of Apr-Jun rally) as investors await the second estimate of the UK third quarter GDP.

    Devil in the details

    The second estimate is widely expected to keep the growth rate unrevised at 2.3%y/y and 0.5%q/q. However, investors would like to see if the GDP remained steady on domestic demand and how the external trade (trade balance) is performing amid falling EUR/GBP exchange rate.

    The analysts from TD Rates, FX & Commodities Strategy state, “The second estimate of Q3 GDP is released, which will provide more details on the breakdown of demand in the quarter. We don’t expect the previously-released 0.5% q/q number to be revised, but a better look at some of the underlying details should help ascertain the health of (especially) the domestic UK economy.”

    GBP/USD Technical Levels

    At 1.5080, the immediate resistance is seen at 1.5087 (61.8% of Apr-Jun rally) and support is seen at 1.5053 (Nov 24 low). A break below 1.5053 could be seen in case the GDP is revised lower, opening doors for a re-test of 1.5027 (monthly low) and 1.50 levels. On the other hand, an upwardly revised GDP could see the pair make a run at 1.5248 (50% of Apr-Jun rally).
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