Global macro overview for 22/02/2018

In the last three months of 2017, the British economy grew at a quarterly rate of 0.4%, which clearly disappointed economists as a rise of 0.5% was expected. The lower reading was significantly influenced by lower individual consumption (0.3%, consensus: 0.4%), whose impact was strongly sought by the increase in the government spending (0.6%, consensus: 0.3%) or returning to favor investments in fixed assets (1.1%, consensus: 0.5%). The trade data also failed to provide support to the British economy. In quarterly terms, the volume of exports fell by 0.2% with an expected increase of 0.5%. Only the Services Index data has beat the expectations of 0.4% as the number released was slightly better at the level of 0.6%.

Let's now take a look at the GBP/USD technical picture at the H4 time frame after the data was published. The pound remains relatively insensitive to the above indications. In the first reaction, GBP/USD fell by about 10 pips to the level of 1.3880 so far, but the recent breakout through the technical support at the level of 1.3921 looks irreversible. The next technical support is seen at the level of 1.3818 and it might be tested soon, as the momentum is below its fifty level and clearly points to the downside.

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