After touching a two-week low in the previous session, the pound is on the rise versus the US dollar on Friday. GBP/USD is up 0.3% targeting $1.3050 after hitting a nadir of $1.2991 in the previous session.
The pound is receiving support from better than expected GDP data. UK economic growth was revised up, growing a better than forecast 0.4% quarter on quarter in the final revision for the three months to September. On an annual basis GDP ticked higher to 1.1%, an improvement on 1% but still very sluggish.
The better than forecast reading comes a day after the BoE said that it expects Q4 GDP growth to be “marginal” with a forecast of just 0.1% growth.
Whilst the pound has pushed higher on the stronger reading gains are expected to be short lived as no deal Brexit concerns keep the lid on any pound optimism.
Withdrawal Bill Vote
Attention will now turn to Parliament where MP’s is due to vote on the Withdrawal Bill. The Bill is expected to pass through the House of Commons without any further hold ups, given Boris Johnson’s 80 seat majority. The Brexit bill contains no possibility of extension will keep no deal Brexit fears alive and kicking
US GDP up next
GBP/USD traders will now look ahead to US data releases. GDP, the third revision for Q3. No change is expected from the previous reading at 2.1%, the initial reading was 1.9%. Upbeat personal spending and core PCE would be seen as validating the Fed’s recent decision to keep rates on hold potentially sending the dollar higher.
Levels to watch:
The pair is currently trading below its 50 & 100 sma and above its 200 sma. GBP/USD bounced off support at $1.2990/$1.30. Should the price break through this support, the price decline could accelerate towards support at $1.2950, prior to $1.29. On the upside resistance can be seen at $1.31 prior to $1.3125.
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