GBP/USD quickly bounces off lows post-UK data, still below 1.34 handle

   •  UK Q3 GDP at 0.4% q/q (in line), 1.7% y/y (better than expected).
   •  UK current account deficit shrinks less than expected.
   •  Reviving USD demand now seems to cap gains.

The GBP/USD pair quickly reversed a dip to 1.3360 area and jumped back to the top end of its daily trading range, albeit remained capped below the 1.3400 handle post-mixed UK economic releases. 

The pair bounced off lows after the final UK Q3 GDP print matched original estimates and came in to show q-o-q growth of 0.4%, with the yearly growth rate rising to 1.7% as against 1.5% expected.

The upbeat GDP print, to some extent, got negated by a disappointment from the UK current account data, showing that deficit shrank less-than-expected to £22.8 billion in Q3 from previous quarter’s revised deficit of £25.8 billion. 

Today’s mixed UK economic data failed to provide the required momentum to lift the pair beyond the 1.3400 handle. Moreover, a goodish pickup in the US Dollar demand further collaborated towards keeping a lid on any strong follow-through momentum. 

Investors now look forward to the US economic docket, featuring the release of personal income/spending figures for November, along with the Fed's preferred inflation gauge - core PCE price index, Durable Goods Orders, New Home Sales and the Michigan consumer sentiment index, for some fresh impetus.

Technical levels to watch

A clear break through the mentioned barrier is likely to accelerate the up-move towards 1.3470-75 supply zone before the pair eventually darts towards reclaiming the key 1.35 psychological mark.

On the flip side, the 1.3330-25 region now seems to have emerged as immediate support, which if broken could drag the pair below 1.3300 handle towards its next support at 50-day SMA, near the 1.3275 region.