GBP/USD finds bids at 1-hr 50-MA ahead of UK GDP release

GBP/USD found takers around the 1-hour 50-MA level of 1.3407 and rose to 1.3422, but still remains negative on the day ahead of the UK GDP release.

Analyst consensus for the final reading of the second quarter UK GDP is for it to stay at 0.3% quarter-on-quarter and 1.7% year-on-year. UK consumer credit, mortgage approvals and total business investment are due at the same time, while Nationwide housing prices are due as well.

Focus on UK index of services

The index of services (3M/3M) August is seen rising 0.7% in August vs. 0.5% previous. The UK economy is still dominated by the service sector. Hence, an improvement in the service sector activity could boost the demand for the British Pound.

Later in the day, the focus would shift to Fed's preferred measure of inflation - core PCE. A better-than-expected number would add credence to the reflation story and shall open doors for another round of broad based rally in the greenback.

GBP/USD Technical Levels

The 1-hour chart shows a bullish break of the falling channel. A break above 1.3439 [1-hour 100-MA] would expose 1.3484 [1-hour 200-MA] and 1.35 [zero levels]. On the downside, breach of support at 1.34 [zero levels] could yield a sell-off to 1.3343 [previous day's low] and 1.3320 [38.2% Fib R of Aug 24 low - Sep 20 high].

Read - GBP/USD analysis: recovery could extend, on positive UK data