The GDP of the United Kingdom in the third quarter increased by 0.6%, drawing the annual dynamics to 1.5% y / y. A slight disappointment was the dynamics for September alone when the growth was zero against the forecast of 0.1%. However, the production was positive, which in September rose by 0.2% m / m, two times stronger than expected. The trade deficit unexpectedly shrank: up to GBP 9.7 billion from GBP 11.7 billion. Together, the data has a slightly positive color, though without any long-lasting positive effect.
The GBP lost 0.25% and fell to the level of 1,2941 in the face of the increasingly tense situation in the British government. The Prime Minister Theresa May actions are growing concerns about whether she will be able to develop a mutually acceptable UK divorce plan with the EU. Less than five months ahead of Brexit planned for March 29, negotiations on the land border support plan between Northern Ireland, which is ruled by Great Britain and Ireland, are again staying in place. At the end of the EU and UK will come to agree. Both sides want to reach an agreement, but the only risk is whether May will continue to be prime minister.
Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market has gapped down on Monday and made a local low at the level of 1.2852 which is a technical support located just below the 61% Fibo at 1.2878. The nearest technical resistance is located where the gap down is, that means between the levels of 1.2948 - 1.2958, but it does not look like the bulls are strong enough to bounce up yet: the momentum is weak, negative and points south and the market conditions are not yet oversold. In a case of a further breakout lower, the next technical support is seen at the level of 1.2828 and 1.2798.
