GBP/USD – Bulls maintain control ahead of UK GDP release

GBP/USD maintains a strong short-term outlook, extending its rebound following Tuesday’s 1% surge, which generated a positive signal by retracing over 50% of the 1.3444/1.3139 pullback and forming a bullish engulfing pattern on the daily chart.

The rally continued on Wednesday, surpassing the 61.8% Fibonacci retracement, further reinforcing a reversal signal after Tuesday’s sharp rebound indicated the corrective phase from the 2025 high (1.3444) may be over.

A bear trap beneath the 38.2% Fibonacci level of 1.3444/1.3139 adds to the optimistic near-term outlook, supported by mostly bullish daily technical indicators.

Market focus now shifts to Thursday’s UK GDP data, where expectations are set for 0.6% growth in Q1, significantly outperforming the 0.1% expansion in the first quarter of 2024, despite a forecast of flat growth in March compared to February’s 0.5% rise.

Stronger-than-expected GDP data would likely boost the pound, while also reducing pressure on the Bank of England to consider another rate cut in June, with expectations for a cut already diminishing after May’s hawkish reduction.

Additionally, a successful trade agreement with the US could ease uncertainty, removing a major barrier to economic growth and further supporting sterling.

Res: 1.3360; 1.3402; 1.3444; 1.3500
Sup: 1.3270; 1.3232; 1.3200; 1.3162