According to the Second GDP Estimate data, in the past quarter, the UK economy grew at an annual rate of 1.5%. Those are the results from more detailed national accounts, which confirm the preliminary estimates provided by the Office for National Statistics. In the presented report, the investment in fixed assets was considerably slower, which in quarterly terms amounted to only 0.2% against previously reported 0.6%. The impact of this subcomponent effectively compensates for a stronger rise of individual consumption, which recorded a jump significantly different from market expectations (0.6% q/q, consensus: 0.4%). The negative contribution of net exports due to the stronger import growth (1.1% q/q, consensus: 0.9%) is also a concern.
The latest Bank of England interest rate hike last month was considered to be a conditional "dovish hike" as the economic data did not really justify the interest rate hike. Currently, according to the newest data, the economic growth pace is steady which favors another interest rate hike, but the inflationary pressures are low. The question remains, which one of this aspect of the economy will be the key focus of BoE in the coming months.
Let's now take a look at the GBP/USD technical picture at the H4 time frame. The pound remained relatively insensitive to the above data. The price has tested the technical resistance at the level of 1.3338 and reversed, so is currently trading at 1.3300.The market conditions are overbought, so is bull will not find more strength to violate the level of 1.3338, the next support at the level of 1.3279 is likely to be tested soon.
