Gbpusd To Challenge Support After Uk Gdp

Gbpusd To Challenge Support After Uk Gdp by Emily Clark last updated on December 05, 2023

GBP/USD To Challenge 1.2200 After UK GDP Release

We finally have the Q3 GDP results from the UK, which showed an increase of 0.6% on an annual basis. Despite the positive news, the GBP/USD pair continued its bearish momentum and lost the 1.22 handle on Friday.

It appears that investors are now looking at the upcoming data from the UK after the GDP failed to bring out any reaction. At the same time, the greenback is also enjoying a higher demand from the FX players as the chances of more rate hikes have increased tremendously.

The 1.22 level is really important as it coincides with the 23.6% Fib retracement as well as the 100 SMA on the H4 chart. In addition, the 200 SMA is also present at 1.22, which further highlights the importance of this level.

GBP/USD En Route To 1.22 & 1.2150 Support Levels

So, if the GBP/USD buyers lose the 1.22 handle, it will confirm the conversion of this level from support to resistance. Next up are the 1.2150, 1.2140, and then the 1.21 support levels that will likely be targeted by the bears.

On the top side, we have the 50 SMA acting as dynamic resistance located at the 1.2250. After that, we have the 1.2275 and then the 1.2300, which is also a round figure resistance zone.

The bigger picture is that GBP/USD bulls are facing difficulty in staging any impressive rally during Friday's session. That's why the dominant theme in GBP/USD is sideways trading with a higher chance of closing the day in red.

Looking back at the Q3 GDP from the UK, the rate of expansion was 0.6% on an annual basis. From the market's perspective, only an increase of 0.5% was expected, which means the actual reading was bullish.

Elsewhere, the industrial production for the month of September showed no improvement at all. On the other hand, a jump of 0.1% was witnessed in the UK's manufacturing production. In addition, the Total Business Investment from the UK also showed a decline during the Q3.

In short, the data from the UK is mixed at best, which is the reason why GBP/USD failed to print any big moves on the short & long-term charts.