GBPUSD Analysis: Sterling dropped after UK data missed

GBPUSD dropped slightly after GDP and manufacturing data missed expectation. The drop saw price in the lower region of 1.31 after positive BREXIT rumors saw price climber toward 1.32 yesterday.

The Pound sterling continued its bullish run yesterday rising close to 150 Pips after Monday’s price drop. The rally was fueled by rumors of BREXIT deal nearing completion. However, price has dropped about 30 Pips after the UK data were released early in the London session. The UK GDP and manufacturing data lagged behind consensus estimates with GDP unchanged and manufacturing data falling -0.2% m/m in August. BREXIT talks and headlines still remain the biggest risk. MPC member Haldane will speak later today.

GBPUSD Technical Overview and Important Price level

In the last update, we expected price to continue downside. This was the continuation of the 25th September bearish forecast. After the drop to 1.29 we expected the bullish run to start again. The chart below shows Elliott wave analysis of GBPUSD and the important price levels.

From 1.292, a new impulse wave rally is taking place. The drop from 1.318 was price reaction to the negative U.K data. The drop from 1.318 could continue to 1.308-1.3107 intraday Fib-ratio support (50-61.8% Fib-retracement of the 1.303-1.318 rally. Price is expected to continue upside afterwards. A break above 1.318 could see price aiming 1.329 after surpassing 1.321 resistance level. On the downside, 1.303 is the nearest support, if price drops below 1.308. A break below 1.303 will likely continue to the next support at 1.292.

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