GBPUSD retreat today after the Office of National Statistics announced the largest quarterly drop in the UK economy since 1955 after a 2.5% contraction in the first half. The office said that are possible revisions amid the challenges in collecting data.
UK GDP in Record Contraction!
UK economy contracted by 19.8% in the second quarter, the initial estimate was for -20.4%, analysts expectations was for a contraction of 21.7%. On the annualized base, the contraction was at 21.5% below the expectations of -21.7%. Services, production and construction experience record falls in the second half. Services sectors contracted by 19.2% while the construction output shrinks by 35.7% and production output drop by 16.3%. The UK Total Business Investment came in at -26.1%, beating the expectations of -31.3% in the second quarter. The Private Consumption came in at -23.6% below the forecast of -23.1% the previous reading was at -23.1%.
UK economy contracted the most among the most advanced economies.
United Kingdom Nationwide Housing Prices picked up to 5%, topping the estimates of 4.5% in September marking the highest reading since 2016. The monthly Housing Prices came in at 0.9% following a 2% rise in the previous month.
GBPUSD Reaction To GDP Figures
GBPUSD is trading slightly lower after the release of the GDP data, as of writing the pair is 0.35% lower at 1.2814.
GBPUSD Technical Analysis
GBPUSD correction from the recent highs at 1.34 stalled the previous week at the 100-day moving average support. A rebound started from that level on Monday drove the price above 1.28 amid weakness in USD.
Support for the pair stands at 1.2805 the daily low. The strong support at 1.2749 – the 100-day moving average – is the next level to watch. A break below might test the recent lows at 1.2675 from September 23.
On the other side, resistance for GBPUSD is at 1.2873 the daily top. More sellers would emerge at 1.2917 the high from September 28. A break above the 50-day SMA at 1.3025 might be the beginning of another leg higher.
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GBPUSD Daily Chart
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