The latest UK data showed annualized growth of 1.3%, in line with market expectations and slightly below the previous reading of 1.4%. The report had a broadly neutral impact on sterling as it confirmed that the UK economy continues to expand, albeit at a moderate pace, with no signs of acceleration.
For both, the lack of surprise is the key takeaway. With the data in line with consensus forecasts, investors have little reason to reassess their current macroeconomic outlook. In such cases, the pound does not tend to attract new buying momentum, but also avoids strong selling pressure.
However, the slight slowdown in growth compared to the previous period creates a backdrop of modest caution for sterling. The weaker figure may indicate that the economy remains sensitive to high interest rates and weakening domestic demand. This interpretation could temper expectations of further monetary tightening by the Bank of England and limit the scope for more aggressive communication.
In the short term, the direct market impact of this GDP release is seen as largely neutral, albeit with a slight bearish bias for the pound. Further direction will likely depend on upcoming UK and labor market reports, along with developments and broader global risk sentiment.
Technical analysis: GBP/USD
H4 Chart:
According to the H4 chart, the pair has entered a wide consolidation zone around 1.3418. We anticipate a possible range extension towards 1.3500 in the short term, followed by a corrective pullback to 1.3418. Once this pullback is completed, the broader uptrend is expected to resume, targeting 1.3520, with potential for a further extension towards 1.3550.
This outlook is supported by the MACD indicator, with its signal line situated above zero and pointing firmly upwards.
H1 Chart:
On the H1 chart, price action formed a tight consolidation around 1.3424 before breaking higher and advancing to 1.3492 (a local target). We now expect a corrective decline to retest the 1.3424 level from above. Once this correction concludes, attention will turn to the possibility of a subsequent wave of growth towards 1.3533.
This scenario is validated by the stochastic oscillator, whose signal line is above 80 and has started to turn towards the 20 level, indicating short-term corrective momentum.
Conclusion
The GBP/USD pair is likely to remain rangebound on the back of online GDP data, which neither decisively strengthens nor weakens the sterling narrative. While the technical structure favors further upside in the medium term, the short-term price action suggests that a period of consolidation or mild correction may precede any renewed bullish momentum.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
