The Sterling is higher against major peers today as price action and rebounds from the precipitous fall from 1.6666 against the dollar ahead of the preliminary gross domestic product data. Analysts expect preliminary data to show a .7 percent increase in growth expansion, slightly down from .8 percent in the previous quarter.
The Royal Bank of Canada’s head G10 FX strategist Adam Cole believes there will be “a continuation of the above-trend growth that we’ve seen for three quarters.” Cole explained that traders are trying to get ahead of the first interest rate increase, which will be bullish for the Sterling and allow it to continue to outperform. Within the last year, the pound jumped 9.6 percent and outpaced its nine peers in the G10 currency basket.
Resistance on the 4H chart is present at 1.6587 and just a tad above 1.6600. A Fibonacci fan from the 20-day low gives a little indication of potential support and resistance levels.If the GBPUSD breaks to the downside, support will likely lay at 1.6545 before testing 1.6500. If the GDP data comes in lest than expected, traders could sell the Sterling off given its recent performance. In that case, look for the pair to fall down to 1.6480/85.
However, data that matches or beats expectations will send the GBPUSD to retest the highs. If traders get really ecstatic over the numbers, a potential to hit 1.6700/25 is probable.