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Since the break of 1.53295 support level on 23, September. GBPUSD has broken 1.51683 three times but was unable to sustain it or to establish a decisive price action below that level.
I won’t be quick to paint a broader bearish outlook as long as 1.50776 support level that was established in April this year holds but its break will see more selloff and turn the pair outlook downward, which should give us 1.49540.
Though, considering positive economic data coming out of UK, like current account deficit reduction from £24 billion to £16.8 billion beating expected £22.2 billion, I am incline to think we might not see reasonable downside yet, hence, a break of 1.50776 is needed to confirm further bearish.
But on the upside, a sustainable break of 1.51683 should give us 1.5329, above 20 days moving average and 1.55999.
The UK deficit is important for two reasons, it shows exports is picking up compared with what was widely believed that exports will remain poor due to strong GBP. Two, the data shows that UK economy is 5.9 percent above pre-cession peak, 0.7 percent more than previously estimated 5.2 percent.
On the other hand, US economy has been showing stronger economic growth with increased in job creations and surge in personal incomes which is fueling consumer spending, the main catalyst of the US economy since export is still largely on the downside. This explain the low volume on GBPUSD pair.
Maybe it is better to trade any of these currencies against weaker currencies, like I am doing with EURGBP.