GBP/USD Is Mostly Flat After GDP Data

Key Insights

• The fourth-quarter UK GDP growth exceeds analyst expectations. 
• U.S. dollar attempts to stabilize after the recent sell-off. 
• A move above 1.3140 will push GBP/USD towards the resistance at 1.3175.

British Pound Tries To Gain More Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3140, while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is testing the support level at 97.75. In case the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum and move towards the next support at the 50 EMA at 97.45, which will be bullish for GBP/USD.

UK has recently released the final reading of the fourth-quarter GDP Growth Rate report. The report indicated that GDP increased by 1.3% quarter-over-quarter, compared to analyst consensus of 1%. However, the economic situation in the world has changed materially in the first quarter of 2022, so the better-than-expected report had minimal impact on currency dynamics.

Foreign exchange market traders also had a chance to take a look at the UK Nationwide Housing Prices report for March. The report showed that Nationwide Housing Prices increased by 1.1% month-over-month, compared to analyst consensus of 0.8%. On a year-over-year basis, Nationwide Housing Prices increased by 14.3%.

Technical Analysis

GBP/USD is testing the resistance level at 1.3140. In case this test is successful, GBP/USD will move towards the next resistance at the 20 EMA at 1.3175.

A successful test of the resistance at the 20 EMA will push GBP/USD towards the resistance at 1.3200. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3230.

On the support side, the nearest support level for GBP/USD is located at 1.3110. In case GBP/USD declines below this level, it will move towards the next support level at 1.3080. A move below 1.3080 will open the way to the test of the support at 1.3050.

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