GBP fell after the worst GDP report in last five years

The UK economy grew less than expected, with 2017 registering the weakest growth in the last 5 years. This comes amid high inflation that has begun to undermine consumers and business on the island. The lower growth of 0.4% on a monthly basis has also slowed the annual performance of the British economy to 1.7%.

Low inflation in the country has forced Bank Of England to raise interest rates, as it is now a whole percentage higher than a healthy 2%. In the long run, this will lead to a strong GBP and difficult exports, which is worrying about growth.

Currently, however, the market only evaluates poor GDP data, with GBP falling against major currencies.

Technically, if we look at GBP/USD, the long-term trend remains rising. Currently, the price is in a short-term adjustment, in the middle of the upside, and the momentary weakness of the pound and the stabilizing dollar are likely to lead to a further decline in the strong support zone between 1.3660 and 1.3700. That is where it will be good to look for a pound promotion signal. Demarker is in a neutral zone and does not signal the next pair movement.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

Read more:

• GBPBGN: increase in price is more probable from the current levels
• EURGBP: probability for an upcoming downward impulse
• GBPUSD short term sentiment in front of important data at 11:30 (GMT+3)
• A price below 2.268 can lead to a new decline by the pound
• Pound rises after the defeat of May’s Brexit deal