The GBP/USD fell apart at the psychologically important level at 1.3000 again at the end of this week’s transactions and ahead of the release of a group of important UK economic data. The pair pulled back to the support level at 1.3005 at the time of writing. The gains during this week drove the pair up to the resistance level at 1.3175 after the good feelings towards reaching a Brexit deal. The return of the pair’s losses were due to the announcement of the monetary policy from the Federal Reserve yesterday, as the bank restated going forward with more rate raises as long as the U.S economy is strong. This was a clear signal to the investors and banks that the bank intends to raise the interest rate for a fourth time this year next month.
The pound will first monitor the announcement of GDP, the manufacturing production index, trade balance and business investment rate data. The USD will monitor the announcement of the PPI and the Consumer Confident data from Michigan.
The pound is enjoying a strong week, as it has achieved gains of 1.22% pushing it to its highest level in 3 weeks, and it is expected that the initial Q3 GDP for the UK will achieve strong gains of up to 0.6%, after a 0.4% increase in the Q2. It is likely that the GDP announcement will provide enough momentum for the pound to achieve some goals.
Technically: any GBP/USD break below the psychologically important support at the 1.3000 will change the pair’s trend to bearish and will therefore test stronger support levels. The nearst of these will 1.2940, 1.2880 and 1.2800. The bullish trend will resume if it goes to retest the resistance at 1.3175 and gets established above that.