/GBP/USD nearing the 1.43 handle and the 200 WMA | by Author: Flavio Tosti | FXStreet

GBP/USD nearing the 1.43 handle and the 200 WMA | by Author: Flavio Tosti | FXStreet

UK GDP is the key macroeconomic release of the week.  The 200-period simple moving average is a line in the sand.  The GBP/USD is trading at around 1.4229, up 0.60% so far on Monday as the Sterling keeps its bullish strength from last week´s hawkish tone from the Bank of England.  The BoE, last Thursday, “tied the likelihood of future interest rate hikes to UK growth of 1.5% yr/yr” according to Reuters. It is worth noting that a GDP growth of 1.5% would actually be equal to the lowest reading since June 2013 year-on-year. While the prospect of hiking rates strengthened the Pound, “the likelihood that higher rates will stifle an economy that has markedly slowed suggests that any rally will be undermined by fundamentals.”, according to Reuters. This Thursday, Q4 GDP is expected to decelerate and come in at 1.4% y/y and this may discourage the MPC to hike while a rate hike of 25bps in May has already been priced in by the market. This would suggest that a close above the 200-period weekly simple moving average would become unlikely. On the other hand, if the GDP is higher than expected a jump to 1.5500 become a possibility, according to Reuters analysts.   GBP/USD weekly chart The bulls are quickly approaching the 200-period simple moving average in the weekly chart which may act as dynamic resistance while both the RSI and MACD remain constructive.  GBP/USD daily chart Cable bulls are eyeing the high of 2018 at 1.4347.  GBP/USD 1-hour chart The bull trend is intact as bulls keep printing higher highs and lower highs, however, the market is about 70 pips away from the 1.43 handle which is a resistance area with the high of 2018 at 1.4347 and the 200-period simple moving average on the weekly chart. Support is seen at the 1.4100 figure, the 61.8% Fibonacci retracement of the January-March bear leg, followed by the 1.40 handle swing low and 1.3900-1.3950 area with the 100-period simple moving average.