The pound continues climbing, finally enjoying the positive data. GDP growth in Q3 was confirmed at 0.8%, as seen in the initial release and as expected. Despite the “as expected†headline, the details of growth point to a wider recovery.
GBP/USD moved higher and broke above the 1.63 line which worked as resistance many times in the past. However, the road remains rough for reaching multi-year highs, even if they are not too far away.
The updated GDP report contained a few changes in the composition: growth in the construction sector, which led the recovery, dropped from 2.5% to 1.7%. On the other hand, household consumption rose by 0.8%, better than earlier. This shows a more balanced growth, and not only growth in construction, something which could turn into a bubble.
GBP/USD
Cable traded around 1.62 and gradually climbed even before the release. It broke above resistance at 1.6260, which was a peak in recent months and peaked out at 1.6326. While 1.63 was lost at the time of writing, the 1.6260 line should provide support.
The year to date high was 1.6380, seen on January 2nd. Beyond this line, we return to levels seen back in August 2011. For more lines, events and analysis, see the GBP/USD forecast.
