The GBP/USD price analysis is optimistic amid upbeat UK GDP data. The pound rose after figures released on Friday showed that the UK economy has recovered from the Covid-19 pandemic much faster than expected. Moreover, the figures showed that Britain is no longer the poorest performer in the G7.

According to the Office for National Statistics, in the three months to June, GDP was 1.8 per cent over its pre-pandemic level in the last three months of 2019. Previously, the statistics agency forecasted that GDP in the second quarter of 2023 was 0.2 per cent under its level in the fourth quarter of 2019.

Initially, the UK was the only G7 country still recording growth below pre-pandemic levels. The new numbers give Britain a similar performance to France and a more robust rebound than Germany. However, its recovery is still weaker than in other countries.

Economists still believe the UK’s performance was quite poor compared to other leading economies.

Ruth Gregory, an economist at the consultancy Capital Economics, said the figures did “not change the overall picture that the economy was lagging behind all other G7 countries, aside from Germany and France, since the pandemic.”

Moreover, she noted that higher interest rates would likely trigger a mild recession, leading to a 0.5 per cent fall in GDP in coming quarters.

GBP/USD key events today

After the UK GDP report, investors will focus on US reports, including:

• The core Personal Consumption Expenditure (PCE) price index.

GBP/USD technical price analysis: Bulls resurface, breaking the 30-SMA line.

GBP/USD 4-hour chart

The pound has recovered beyond the 30-SMA line on the 4-hour chart. This is a significant shift as it could mark the start of the end of the downtrend. With bulls now at the helm, the RSI has crossed above 50, indicating a shift to solid bullish momentum.

Moreover, the price has broken above the 1.2200 key level. The next resistance for the current bullish move is at the 1.2302 level. For bulls to cement this shift in sentiment, they must start making higher highs and lows. Therefore, this means a break above 1.2302 and a retest of the 1.2401 key level.

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