GBPUSD: Forex Technical Analysis – Accelerating growth supports British Pound

By IFCMarkets

Accelerating economic growth supports British Pound

UK GDP grew 0.4% in Q3, above expected 0.3% rate. Will the GBPUSD resume strengthening?

UK economy accelerated unexpectedly in the third quarter 2017: Q3 GDP recorded surprise 0.4% growth over quarter when a steady growth of 0.3% was expected. With inflation rising to 3% in September from 2.9% on year in August this raises chances the Bank of England may increase borrowing costs at its November 2 meeting next week.

On the daily chart the GBPUSD: D1 has breached above the 50-day moving average MA(50).

• The Parabolic indicator gives a sell signal.
• The Donchian channel indicates an uptrend, it is tilted up.
• The MACD indicator is below the signal line and the gap is narrowing, which is a bullish signal.
• The stochastic oscillator is rising but hasn’t reached the overbought zone.

We believe the bullish movement will continue after the price breaches above the upper Donchian boundary at 1.3326. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 1.3087. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.3087) without reaching the order (1.3328) we recommend cancelling the position: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Market Analysis provided by IFCMarkets