GBP/USD consolidated around the 1.6822 resistance area on Monday ahead of Britain’s Gross Domestic Product (GDP) report for the first quarter, an unexpected actual outcome might incite huge volatility in cable. Not to mention, the US GDP and Monetary Policy are also due tomorrow, providing long term direction to the pair.
As of this writing, the pair is being traded near 1.6812. A hurdle may be noted near 1.6822 that is the swing high of the last major rally ahead of 1.6857, the intraday high of yesterday. A break above 1.6857 will open doors for fresh multi-year highs, threatening the 1.7000 handle in the medium term.
On the downside, the pair is expected to find a support around 1.6684, the 23.6% fib level, ahead of 1.6670, the long term channel support as demonstrated in the above chart. A break and daily closing below the channel resistance could begin the long-awaited correction phase, exposing 1.6250 in the long term.
UK Gross Domestic Product
Today the National Statistics Department of the UK will release the GDP report. According to the median projection of different economists, the economy grew at 3.2% during the first quarter as compared to 2.7% in the same quarter of the year before. Similarly, the growth increased to 0.9% in first quarter compared with 0.7% in the quarter before, better than expected actual outcome will be seen as very bullish for the pair.
If the GDP data comes better than the forecast, then obviously buying the pair above the yesterday’s low could be a good option, the stop should be placed just below the intraday low of Monday while the initial target may be 1.6950.