GBP/USD: Solid UK GDP Data Powerless Against Resilient Dollar

Despite a glimmer of hope from the British economy, GBP/USD remains capped below the 1.3440 resistance, seemingly unable to break free from the gravitational pull of a strengthening US Dollar. The pair has settled into a choppy consolidation phase, highlighting the market's fixation on interest rate differentials over domestic growth data.

Economic Resilience vs. Monetary Reality

The UK‘s latest GDP report surprised to the upside, posting a 0.3% month-on-month growth in November, reversing October’s contraction and beating the 0.1% forecast. The recovery was broad-based, led by a 0.3% rise in services and a robust 2.1% jump in manufacturing.

However, this “good news” has failed to translate into a sustained Sterling rally. The primary headwind remains the Federal Reserve. Strong USPPI and retail sales data have reinforced the narrative that the Fed will keep rates elevated for longer. In contrast, while the UK economy is avoiding recession, the Bank of England remains in a precarious position, balancing sticky inflation against a fragile recovery.

Technical Outlook

The market structure for Cable reflects indecision.

• Resistance: The 1.3442 level is acting as a hard ceiling, with selling pressure emerging on every approach.
• Support: Immediate support lies at 1.3422.
• Momentum: RSI is hovering near neutral (51.8) and MACD is flatlining, suggesting the pair is awaiting a new catalyst—likely from the US side of the equation—to determine its next directional break. Until US yields soften, Sterlings upside appears strictly limited.