Global macro overview for 29/01/2016:
The UK GDP data for the fourth quarter were released yesterday and the figures were in line with expectations (0.5% q/q; 1.9% y/y). The services industry contributed greatly to the GDP increase in the end of 2015 (78.6% of Britain's economic output), while production and construction continued to drag the growth down. For the whole 2015, the UK growth slowed to 2.2% from 2.9% in 2014, the Office for National Statistics says. Importantly, the UK economic output have been rising steadily for the last 12 consecutive quarters and unemployment is at its lowest level for a decade. Therefore, the BoE is likely to be more focused on the global growth problems (particularly in China) that can cause headwinds for the British economic recovery.
Now let's take a look at the technical chart of the GBP/USD pair. Currently, the H4 time frame shows down trend, and the recent bounce from the 1.4078 level is in a shape of a rising wedge. This means that any break below the lower dashed blue line will indicate the downtrend resumption that can even accelerate if the technical support at 1.4218 is violated.