GBP/USD is on a rebound as it finds resistance at 1.3800 ahead of the UK GDP data. In June, the country’s Office of National Statistics noted that the economy had grown by 2.3% MoM, which was higher than the forecasted 2.2.% and prior month’s 2.1%.
On a year-on-year basis, investors will keen on whether the data beats the prior month’s contraction of 6.1%. The numbers come at a time when the UK government is still optimistic about reopening the economy on 19th July even as COVID-19 cases continue to rise. The UK manufacturing production, trade balance data, and BoE governor’s speech will also impact the pair.
At the same time, GBP/USD will be reacting to the Fed monetary policy report. The report comes days after the FOMC meeting minutes, which pushed the dollar index lower. A dovish tone prevails even as the policymakers begin ‘talking about talking about tapering asset purchases’. Notably, the dovish stance has offered support to the currency pair.
GBP/USD technical outlook
GBP/USD is on a rebound after hitting an intraday low of 1.3742 in the previous session. Notably, Thursday’s low was its lowest level in a week. At the time of writing, the currency pair was down by 0.01% at 1.3786. Despite the current rebound, it remains under pressure after dropping from a one-week high of 1.3900 on Tuesday. On a two-hour chart, it is trading slightly below the 25 and 50-day exponential moving averages.
Ahead of the UK GDP data, GBP/USD is likely to continue finding resistance along the 50-day EMA at 1.3800. subsequently, better-than-expected figures may push the prices to the prior resistance levels of 1.3865 and the week’s high of 1.3900. On the flip side, if the numbers miss the estimates, the bears are likely to push the pair to the support level at 1.3730 or lower at 1.3700.