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GPB/USD forex signal - UK Revised GDP - 29 Mar 2018

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The UK's Office for National Statistics (ONS) is expected to release the final GDP numbers for quarter ending December 2017 today. The economists polled observe that the fourth quarter GDP in the UK stood at 0.4%, unchanged from the previous second estimates.

The UK's economy was seen to be strengthening slightly higher and came out above the Bank of England's estimates as well. However, historically compared, the 0.4% pace of growth still remains a slow pace of GDP growth even when compared to other G7 economies.

For the moment, an unchanged print is unlikely to bring much volatility to the UK markets. Investors are already focusing on the first quarter GDP data that will be released in a few weeks time.

Investors are also focusing on the fact that the Bank of England will be hiking rates later this year. As per the previous BoE meeting, the central bank stuck to its hawkish baseline scenario of another rate hike in May 2018. This would bring the UK's interest rates of 0.75% and marks a second rate hike from the central bank in nearly a decade and after the UK's vote to leave the EU.

With the transitory deal stuck between EU and the UK which allows for a smooth exit of the UK from the Eurozone in 2020, the economy is expected to pick up in the near term.

Today's forex trading signal of the day is GBPUSD. The positive sentiment in the UK was clearly reflected in the GBPUSD which has managed to recover back to the $1.40 handle. Technically, further gains could be in store as the British pound takes advantage of a weaker U.S. dollar.

In the near term, we expect the GBPUSD to extend gains to the upside after giving up the support level at 1.4160. Therefore, we are looking to go long on GBPUSD at 1.4081, targeting 1.4132 where resistance could be established. Stops are ideal to be placed around 1.4062 as we expect GBPUSD to extend gains on the day.

forex signal gbpusd 29 mar 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.