GBP/USD trims gains after upbeat US GDP

The GBP/USD pair trimmed some of its strong gains, albeit remained in positive territory, after better-than-expected US Q3 GDP print. 

Currently trading around 1.2465-70 region, the pair ran through fresh offers and once again seems to face difficulty in clearing 50-day SMA resistance after the revised US GDP print showed US economy registered a stronger-than-expected annualized growth of 3.2% during third quarter of 2016. The reading was higher-than 3.0% annualized growth expected and 2.9% reported previously. 

Upbeat economic growth number provided an additional boost to the already stronger greenback, which continues to be underpinned on growing expectations of faster Fed rate-tightening cycle in 2017.

The pair, however, held on to its recovery gains led by better-than-expected second-tier economic data that included - Mortgage Approvals, BoE’s Consumer Credit, M4 Money Supply and Net Lending to Individuals. The pair has reversed part of losses posted in the previous session but continued with its struggle to decisively break through 1.2500 handle. 

Next on tap would be the Conference Board's Consumer Confidence index, which is expected to climb back to 100.00 mark in November following a higher-than-expected drop to 98.6 in October. Also in focus would be speeches from couple of FOMC members - William Dudley and Jerome Powell, which might provide fresh clues over the Fed’s near-term monetary policy outlook, beyond December meeting, and drive the pair during NY trading session.  

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "In the 4 hours chart, technical indicators have turned north, and are crossing their mid-lines towards the upside, although below previous highs, while the price is advancing above its 20 SMA and 200 EMA, both horizontal and quite close to each other, reflecting the absence of directional strength. Further gains beyond 1.2470 should lead to a retest of the 1.2520 region, where selling interest will likely surge. Should the price accelerate higher through this last, there's scope for a rally up to 1.2560. Below 1.2410 on the other hand, the pair can go down towards the mentioned ascendant trend line, while below this last the next bearish target comes at 1.2300/30."