GBP/USD Eyes 1.7043 As UK GDP Report Looms

Market Sentiment: Bullish

Key Takeaways:
• GBP/USD posts consistent gains before the first quarter GDP report
• 1.7043 could be the initial target of the current upside rally
• The daily trendline remains an attractive zone for buyers

GBP/USD extended upside movement on Thursday, for the sixth straight day ahead of Britain’s first quarter Gross Domestic Product (GDP) report. The pair is expected to hit the 1.7000 milestone in the near future as the bias remains extremely bullish due to Higher High and Higher Low in the recent wave.

Technical Analysis

As of this writing, the pair is being traded near 1.6897. A support may be noted around 1.6870, the 23.6% fib level ahead of 1.6792, the 38.2% fib level and then the long term channel support as demonstrated in the following chart, a break and daily closing below the trendline support will push the pair into negative territory, validating a dip towards the 1.6600 support area.

On the upside, the pair is likely to face a hurdle around 1.6996, the swing high of the previous wave ahead of 1.7043 that is the high of 2009. A break above 1.7043 could spur renewed buying interest, opening doors for fresh multi-year highs.

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GDP Report

Today the national statistics department of the United Kingdom will release the Gross Domestic Product (GDP) report. According to the median projection of various economists, the economy grew at 3.1% during the first four months of the ongoing year as compared to the same growth rate in the same duration of the year before. Likewise, the economy managed to grow at 0.8% in the first quarter as compared to 0.7% in the quarter before, better than expected actual readings will be considered bullish for GBP/USD and vice versa.

Trade Ideas

Buying on dips is still a preferred strategy for cable. Huge buying interest is being noted around the long term daily trendline support. If the GDP report comes slightly below than the forecast, even then it will provide a good opportunity on dips.

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