GBP/USD analysis: failure to rally beyond 1.2250 favors a slide towards 1.2000

GBP/USD Current price: 1.2175

The GBP/USD pair surged during London trading hours, advancing up to 1.2271, following the release of the UK first estimate of Q3 GDP. According to the official data, the UK economy is estimated to have grew by 0.5% in the three months to September, compared with the final Q2 figure of 0.7%, and above the 0.3% expected. The economy remains resilient, in spite of Brexit woes, and the data highlighted strong performance in the services industries, which offset falls in other industrial groups. Still, a "hard-Brexit" seems inevitable, and Mark Garnier, Parliamentary Under Secretary of State at the Department for International Trade, admitted this Thursday that Britain can lose financial pass-porting rights that give banks access to the European Union as a result of Brexit negotiations. Overall, the pair is bearish, and market players are just waiting for a reason to sell it. In the short term, the risk is towards the downside, as in the 1 hour chart, the price has broken below a now bearish 20 SMA, while technical indicators hover near oversold levels, having pared losses amid declining volume at the end of the US session. In the 4 hours chart, the price is a handful of pips below a still directionless 20 SMA, while technical indicators have entered bearish territory with strong bearish slopes.

Support levels: 1.2130 1.2090 1.2050

Resistance levels: 1.2220 1.2250 1.2290

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