GBPUSD
GBPUSD is finding bids around 1.2350 after today’s roster of economic data from the UK either met or beat expectations. Following the release of news reports, GBPUSD ticked higher to 1.2360 from 1.2324.
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The final reading for the UK’s Q4 2019 GDP report came in as expected at 0.0%. Meanwhile, the country’s current account for the same quarter showed a more modest deficit of 5.6 billion GBP than the consensus at 7 billion GBP. This means that the difference between the value of imported goods, services, and income flows to and from the UK were not as big as expected. Lastly, the revised business investment report for the last quarter of 2019 saw a positive revision. It was initially reported at -1.0% and expectations were for it to remain at that level. However, today it was at -0.5%.
On the 4-hour time frame, it can be seen that GBPUSD is currently testing support at the rising trend line (from connecting the lows of March 23, March 25, and March 26). Using the Fibonacci retracement tool and drawing from the low of March 25 to the high of March 27, it can also be seen that the currency pair just bounced off the 23.6% Fib level. If support at its current price holds, around 1.2340, we could soon see GBPUSD rally to the 200 SMA at 1.2589.
Alternatively, the daily time frame presents a more bearish picture of the currency pair. If GBPUSD closes below yesterday’s low, a three inside down candlestick pattern will have formed. This is considered as a bearish confirmation signal which becomes even more significant because it materialized between the 50% and 61.8% Fib levels (when you draw from the high of March 9 to the low of March 20). Should the candlestick pattern be completed, we may soon see GBPUSD drop to last week’s lows at 1.1450.