GBP/USD: GDP for the 3rd quarter was worse than forecast. Trading Recommendations

Trading recommendations and Technical Analysis – HERE!

 Overview and Dynamics

Data released today showed UK GDP fell short of expectations the Bank of England. GDP growth in the third quarter slowed down to 0.5% against 0.7% in the 2nd quarter against 0.6%, as expected by the forecast. The index of activity in the service sector in August was also worse than expected (0.9% instead of 1.0% forecast). The pair fell by 40 pips to the data, but soon recovered to near the level of the opening price of the trading day.

In the service sector, along with the manufacturing sector, accounting for almost 80% of GDP.

According to the latest data from the National Bureau of Statistics (ONS) the UK, retail sales in the country in September compared with the previous month increased by 1.9% (+ 6.5% yoy), showing the strongest monthly increase since December 2013

However, the price of retail goods in the UK in September also fell by a record 3.6% in annual terms. Thus showing a slowdown in inflation over the past year.

Nevertheless, in spite of the signals of the heads of the Bank of England's intention to start raising rates in the UK at the beginning of 2016, market participants predict a rate hike before the end of 2016 - beginning of 2017.

Today begins a two-day Fed meeting, and tomorrow is published interest rate decision in the US.

If the rate in the United States does not change, then the GBP / USD pair has a chance to continue corrective gains, despite the technical picture of the movement of the pair showing a tendency to decrease.

The pair could get an additional boost on Thursday by preliminary data on GDP, the index for personal consumption expenditures for the 3rd quarter in the US (forecast 1.4% to 1.9% in Q2).