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Forex: GBP/USD may soon test around the 1.5580-1.5600 - Viloria

FXstreet.com (San Francisco) - The UK avoided 3-dip recession on Thursday as The Britain GDP rose by 0.3% in the Q1, above expectations of 0.1% advance and well above 0.3% decline posted in the Q4 2012. Investors were confidence, or at least less worried, about the United Kingdom future and the GBP/USD rose around 300 pips in two days from the 1.5260 region on Thursday to test the 1.5500 in the Friday's session.

"For now, the GBP may continue higher against the USD following the data surprises, "says the Forex.com's analyst Eric Viloria. " Though US growth at 2.5% is much higher than the 0.3% growth in the UK, the implications are more supportive for the GBP."

This data reduces the possibilities that the Bank of England engages in additional QE in the short term. "At the same time, US data may indicate that the previous discussion regarding a tapering of QE may have been premature and the Fed may pursue stimulus in its current form for some time."

Looking for the GBP/USD, the Cable "may soon test around the 1.5580-1.5600 zone which is where the 100-day simple moving average (SMA) and 50% retracement (of the entire decline from 2013 highs to lows) converge," points the Forex.com analyst.

Viloria believes that "a break above that may see towards the 1.5760-90 area which is where the 61.8% Fibonacci retracement and 200-day SMA currently reside. The key downside pivot is currently around the 21-day SMA at about 1.5285."

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