GBP/USD trims some Wednesday’s losses, clings to 1.3450
- Sterling trades up during the day, despite downbeat market sentiment.
- UK’s economy expanded 5.5% in the third quarter.
- US Initial Jobless Claims rose to 362K, thus hurting the US Dollar.
The GBP/USD is rising for the first day out of three, trading at 1.3466, advancing 0.29% in the day at the time of writing.
September and the third quarter are coming to an end. The market sentiment is downbeat, as month-end flows and asset portfolio reshuffling weigh on in the stock market. Major US stock indices post losses between 0.13% and 1.09%. The buck is falling around 0.04% with its US Dollar Index, which measures the buck’s performance against a basket of six peers, currently at 94.33.
UK’s Gross Production rose by 5.5% more than expected, lifts the GBP
In the UK economic docket, the Office of National Statistics (ONS) released the Gross Domestic Product for the third quarter, which rose by 5.5%, better than the 4.5% foreseen. It is 3.3% below pre-Covid levels reached in 2019; however, the economy looks like it is heading in the right direction.
Across the pond, the US Initial Jobless Claims for the week ending on September 24 increased by 362K, 27K more than expected, while the 4-week moving average rose to 340K from 335.75K. At the same time, the US Bureau of Economic Analysis (BEA) released that the US economy in the third quarter grew 6.7%, more than the 6.6% expected.
On Friday, the British economic docket will feature the Markit Manufacturing PMI for September. Regarding the US, Personal Consumption Expenditures and Personal Income data could offer GBP/USD traders fresh clues.
GBP/USD Price Forecast: Technical outlook
Daily chart
Cable is trading around 2021 lows but bounced off 2021 new low around 1.3410, sitting around 50 pips above. A daily close above 1.3540 could form a tweezers-bottom pattern that could propel the British pound for higher prices. On the flip side, the GBP/USD pair stills have more room to fall, with December 21, 2020, low at 1.3187.
The Relative Strength Index is at 33, exited from oversold levels, suggesting that consolidation around 1.3400-1.3500 could lie ahead.
ADDITIONAL LEVELS TO WATCH