- GBP / USD gained traction for the fifth day in a row, although a modest rally in the USD limited gains.
- Better-than-expected first-quarter US GDP figures failed to impress USD bulls or provide any boost.
- A sustained move beyond 1.4000 is needed to support the prospects for a further move to the upside.
The pair GBP/USD it maintained its modest intraday gains above 1.3950 and moved shortly after the release of the US macroeconomic data.
The pair took advantage of its recent positive move and gained some follow-up traction for the fifth straight session on Thursday. The rally was sponsored solely by optimism about the gradual reopening of the UK economy, although it lacked follow-up amid a modest strength in the US dollar.
When investors looked beyond the dovish message from the Fed on Wednesday, a good rally in US Treasury yields helped the USD rebound from the lowest level since February 26. North American session.
The USD bulls seemed rather unimpressed by the US GDP report, which showed that the world’s largest economy expanded at an annualized rate of 6.4% during the first quarter of 2021. This was well above the average. 4.3% increase registered in the previous quarter and consensus estimates for a reading of 6.1%.
As the Fed has repeatedly made sure to maintain the current accommodative monetary policy stance, the robust data did not provide any significant boost to the USD. The moderate market reaction also suggests that the market has already appreciated a relatively faster US economic recovery.
That said, the lack of strong follow-up buying around GBP / USD warrants some caution for aggressive bull traders. Therefore, it will be prudent to wait for sustained strength beyond the key psychological 1.4000 level before positioning for any further short-term appreciation movement.
Technical levels
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