Published: Fri, 29 May 2009 15:13:00 +0200

Forex: GBP/USD tests 1.6175 resistance after the US 1Q GDP data

FXstreet.com (Barcelona) - GBP/USD has risen around 50 pips from 1.6130 to test the 1.6175 resistance level after the smaller than expected revision on US 1Q GDP data. Currently the pair is trading 1.6160/70, 1.30% above today's opening price action.

Gross Domestic Product Annualized has been revised to a 5.7% drop in the First Quarter of 2009 from the -6.1% posted previously. Market expectations was 5.5% decreases between January and March.

Nick Nasad, Analyst at CMS, affirms in his US GDP FXstreet.com Live Coverage that US 1Q GDP data doesn't change the market view: "I think most forecasts had a figure around -5.7%, so it does not come as a surprise (meaning its priced in). the data doesnt change teh underlying conditions that have been pushing around the markets the past couple fo weeks, and that is the feeling that the worst of the recession is over, the financial sectors around the world have stabilized, and that with record low interest rates around the world and fiscal stimulus plans abounding, that we will start to see a return to growth in economies in the 3rd quarter. The US GDP data from the 1st quarter is now almost old news.. that is why there is not much of a reaction. The data doesnt change the narrative."

The FastBrokers Research Team, affirms in the technical view: "The Cable busted through our 2nd tier downtrend line and the psychological 1.60 level as investors return to risk. We view the defeat of our 2nd tier downtrend line as a significant move, giving a green light to the Cable?s bull trend. Our 2nd tier downtrend line stretches back to July 2008 highs, meaning the GBP/USD has a ton of room to the upside with all near-term downtrend pressures out of the way. Investors are reacting to a much stronger than expected Nationwide HPI release, showing home values are improving in Britain"

FastBrokers provide us with its levels: "Fundamentally, we find resistances of 1.6129, 1.6233, 1.6307, 1.6388, and 1.6462. To the downside, we see supports of 1.6062, 1.6011, 1.5949, 1.5886, and 1.5822. The GBP/USD is currently exchanging at 1.6128."

By Fxstreet.com

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