- Summary:
- Weak US data and comments from BoE member Vlieghe on potential 2022 rate hikes triggers a big upside move on the GBP/USD.
The GBP/USD pair hit 2-day highs during the New York session, as underwhelming US data put the greenback on the back foot once more.
Wednesday’s US Dollar recovery suffered a setback after the US GDP data (prelim) failed to meet the 6.5% expectation, coming in at 6.4% instead. A slump in durable goods orders did not help matters, as both the core and headline numbers failed to match the previous month’s numbers.
The core durable goods orders fell monthly from 1.9% (an upward revision) to 1.0%, despite beating expectations. The headline number came in at a woeful -1.3%, down from the 0.8% increase seen in the previous month.
Conversely, the Pound saw strength in comments from Bank of England member Gertjan Vlieghe. Vlieghe said that the BoE would most likely commence rate hikes in 2022 while speaking at a lecture at the University of Bath. These comments triggered fresh demand for the cable.
The GBP/USD is trading 0.41% higher as of writing.
Technical Outlook for GBP/USD
The 1.41535 resistance level is back under attack from the bulls after several failed attempts. The daily candles of Wed and Thursday form a bullish engulfing pattern. A bullish outside day candle leads to a clear breakout, and brings 1.42417 into focus as the pair targets this price where highs were seen on 26 March 2018 and 24 February 2021. Above this level, new 2021 highs emerge, with 1.43657 being the closest target.
On the other hand, a failure of the latest attempt at breaking 1.41535 allows for a pullback towards 1.40602. This move lines up 1.40051 and 1.39484 as additional targets to the south.
GBP/USD Daily Chart
