GBPUSD could not find any reprieve from the bears’ advances last Friday. Despite positive data from the UK, the currency pair was still under selling pressure. It peaked at 1.3078 during the New York session, but steadily traded lower. By the end of last week’s trading, it had settled at 1.2996 with an 11-pip loss.
Upward Revision to the UK’s Third Quarter GDP
The Office for National Statistics reported an upward revision to the UK’s third quarter GDP reading. It was initially expected that the report will still print at 0.3%. However, it was reported that the economy actually grew by 0.4% from the months of July to September.
It was also reported that the UK’s account deficit shrank to its lowest level in 12 years. The current account report for the third quarter was at 15.9 billion GBP. It slightly missed forecasts which were for a 15.7 billion GBP deficit. However, we did see an upward revision to the previous reading. It was reported that the country only had an account deficit of 24.2 billion GBP versus what was initially reported at 24.2 billion GBP.
Direction on GBPUSD to be Dictated by US Data
For today, there are no reports due from the UK. We do have a few data from the US which could dictate the direction on GBPUSD.
At 1:30 pm GMT, the durable goods orders report for November is eyed to come in at 0.2%. Meanwhile, orders excluding transportation or the core durable goods reading is seen at 1.5%. Then at 3:00 pm GMT, new home sales is anticipated to show that there were 730,000 new homes sold in November compared to 2018.
Better-than-expected US data will likely continue to weigh down the pound. On the other hand, worse-than-expected readings could be bearish for the dollar which may help GBPUSD trade higher today.
On the hourly time frame, we can see that the currency pair has been trending lower. This is evidenced by the falling trend line that becomes apparent when you connect the lower highs of GBPUSD from December 19. The trend line also seems to coincide with the 38.2% Fib level when you draw the Fibonacci retracement tool from the high of Friday to its intraday low. Reversal candles around this level, at 1.3010, may indicate that sellers are about to push prices lower. There could be support around 1.2970 where GBPUSD previously made highs on October to November.
On the other hand, a strong bullish close above the trend line around 1.3330 could mean that buyers may soon push the price of GBPUSD to around 1.3080. The currency price peaked at this level last Friday. It also coincides with the 100 SMA on the hourly time frame.