- The pound is trading higher during the day, despite bearish market sentiment.
- The UK economy expanded 5.5% in the third quarter.
- Initial unemployment claims in the United States rose to 362,000, hurting the US dollar.
The GBP/USD It is up for the first day of three, trading at 1.3466, up 0.29% on the day at the time of writing.
September and the third quarter are coming to an end. Market sentiment is pessimistic as month-end flows and asset portfolio reorganization weigh on the stock market. The main US stock indices register losses between 0.13% and 1.09%. The dollar is falling about 0.04% with its US dollar index, which measures the dollar’s performance against a basket of six pairs, currently at 94.33.
UK gross production rose 5.5% more than expected, lifts the British pound
On the UK economic agenda, the Office for National Statistics (ONS) released the Gross Domestic Product for the third quarter, which rose 5.5%, better than the 4.5% forecast. It is 3.3% below the pre-Covid levels reached in 2019; however, the economy seems to be heading in the right direction.
On the other hand, Initial US Unemployment Claims for the week ending September 24 increased by 362,000, 27,000 more than expected, while the 4-week moving average rose to 340,000 from 335,750. At the same time, the US Bureau of Economic Analysis (BEA) published that the US economy in the third quarter grew by 6.7%, more than the 6.6% expected.
On Friday, the UK economic calendar will feature the Markit Manufacturing PMI for September. With respect to the US, personal consumption expenditure and personal income data could offer GBP / USD traders new clues.
GBP / USD Price Forecast: Technical Outlook
The pound is trading around the 2021 lows, but bounced off the new 2021 low around 1.3410, hovering around 50 pips above. A daily close above 1.3540 could form a pincer pattern that could propel the British pound higher. On the other hand, the GBP / USD pair still has more room to fall, with a December 21, 2020 low at 1.3187.
The Relative Strength Index is at 33, breaking out of oversold levels, suggesting that consolidation around 1.3400-1.3500 could be ahead.
Technical levels
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Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
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