GBPUSD is trading higher in today’s European session following the release of today’s roster of economic data from the UK. The currency pair jumped to 1.2940 after initially trading around its Asian session highs at 1.2920.
GBPUSD Chart, 15-minute
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The biggest reports released earlier today were the UK’s GDP reports. For the fourth quarter of 2019, economic growth was flat at 0.0%. This reading was in line with analysts forecast. Meanwhile, for the month of December, the GDP printed at 0.3% and topped expectations which were for a 0.2% uptick.
Along with the GDP, the country’s industrial and manufacturing production data were also released. Unfortunately, they failed to meet expectations. Industrial production for December was only at 0.1% while the consensus was at 0.3%. Meanwhile, manufacturing production only came in at 0.3% and missed the forecast at 0.5%.
On the hourly time frame, we can see that GBPUSD has made higher lows following a series of lower lows. The latest roster of economic data has allowed for the inverse head and shoulders pattern to be completed. In forex trading, this is considered as a bullish reversal pattern. However, for a bigger rally to ensue, GBPUSD will need to close above the neckline resistance around 1.2940. Should this happen, we could see the currency pair rally to its February 5 highs around 1.3065.
On the other hand, if there are not enough buyers to push GBPUSD above the neckline, the currency pair could trade lower. Near-term support is at yesterday’s low at 1.2871.