British Pound (GBP) Latest: GBP/USD Upside Persists , EUR/GBP Bearish - UK GDP Firms

GBP/USD, EUR/GBP Price Analysis & News

• GBP/USD Sees Limited Reaction to Better Than Expected GDP
• EUR/GBP Remains Bearish Below 0.8860

UK Q4 GDP Recap

UK GDP Q4 Y/Y: -6.5% vs Exp. -8.1% (Prior -8.9%) - Q/Q: 1.0% vs Exp. 0.5% (Prior 4.1%)

UK GDP for the fourth quarter came in firmly above expectations at 1% (Exp. 0.5%), which saw the yearly rate at -6.5%, against the consensus of -8.1%. While the GDP data has printed notably better than expected, this is not entirely a surprise, given last week’s BoE monetary policy report, in which the central bank stated that Q4 GDP was materially better than their initial forecasts. In turn, the Pound has seen a very muted reaction to the data with GBP/USD continuing to hover around the 1.38 handle. Going forward, the vaccine rollout will remain among the key drivers for the Pound. On the technical front, upside risks remain for GBP/USD, although, while the pair has eased a touch from the mid-1.38s, dips are likely to be bought with support situated 1.3750-60 and the 20DMA at 1.3708.

GBP/USD Chart: Daily Time Frame

Source: Refinitiv

EUR/GBP Remains Bearish Below 0.8860

EUR/GBP: The cross has struggled to break through key support at 0.8746 (61.8% fibonnaci fib) and thus has found some slight reprieve from its recent sell off. However, the EUR/GBP remains bearish below 0.8860 and thus I remain biased to fading rallies in the cross. As I mentioned last month, the vaccine trade is in full swing, alongside this, with the BoE among the first central banks to talk about tapering QE, GBP is likely to remain underpinned.

EUR/GBP Chart: Daily Time Frame

Source: Refintiiv