Cable Slides Down amid US Growth Data

The Great Britain Pound (GBP) inched lower against the US Dollar (USD) on Friday, decreasing the price of GBPUSD to less than 1.3400 following some key economic events. The technical bias remains bullish because of a higher low in the recent upside rally.

GBP/USD Technical Analysis

As of this writing, the pair is being traded near 1.3366. A hurdle may be noted around 1.3655 (a major horizontal resistance zone) ahead of 1.3900(a psychological level) and then 1.3943 (another major resistance area).

On the downside, a support can be noted around 1.3300 (a psychological number) ahead of 1.2634 (the low of the last major downside move) and then 1.2500 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart. The technical bias shall remain bullish as long as the 1.2700 support area is intact.

US Gross Domestic Product

The U.S. economy expanded a bit faster than previously estimated in the second quarter, recording its quickest rate of growth in more than two years, but the momentum likely slowed in the third quarter due to the impact of Hurricanes Harvey and Irma.

Gross domestic product increased at a 3.1 percent annual rate in the April-June period, the Commerce Department said in its third estimate on Thursday. The upward revision from the 3.0 percent rate of growth reported last month reflected a rise in inventory investment.

Economic growth last quarter was the quickest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists estimate that Harvey and Irma, which struck Texas and Florida, could cut as much as six-tenths of a percentage point from GDP growth in the third quarter.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.

 

usmanahmed7290@gmail.com'

Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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