The GBPUSD surge is being fueled by board-based US Dollar weakening.
During European trading hours on Thursday, GBPUSD gained positive momentum and rose to a weekly high above 1.3000. The risk-on market environment gives the pair a further lift ahead of the publication of US GDP data.
The US Dollar (USD) is under continuous selling pressure. With markets expecting the Federal Reserve to raise interest rates by 25 basis points on Wednesday. Indicating that the Fed has hit its terminal rate.
FOMC Chairman Jerome Powell’s reluctance to endorse the necessity for future rate hikes. As well as his admission that policy is restrictive The comments made during the post-meeting news conference spurred a USD selloff late Wednesday. The S&P 500 Futures and Nasdaq Futures are up 0.6% and 1.2%, respectively. In the European session, indicating the bullish market attitude.
The US Bureau of Economic Analysis will issue the first estimate of Q2 GDP growth.
The US Bureau of Economic Analysis (BEA) predicts an annualized Gross Domestic Product (GDP) increase of 1.8% in the second quarter. A significantly weaker-than-expected GDP growth rate of 1.5% or less might drive the USD to drop further, allowing the GBPUSD to extend its weekly rise. A reading around 2%, on the other hand, might help the USD stage a recovery and limit the pair’s potential. Nonetheless, if risk flows dominate financial markets in the American session, the pair is expected to keep its position.
GBPUSD Technical Outlook
GBPUSD is under pressure. 1.3000 is a strong resistance level (Fibonacci 23.6% retracement of the most recent rally). If the pair climbs above that level and begins to use it as support. It may next target 1.3070 (static level) and 1.3100 (psychological level).
On the downside, 1.2930 (Fibonacci 38.2% retracement, 50-period SMA, 100-period SMA) is the first support level to be tested before 1.2900 (psychological level) and 1.2870 (Fibonacci 50% retracement).
