GBP/USD sideways movement continues: what it means for traders

The success of the British economy in avoiding recession

The British pound saw a noticeable rise against the US dollar at the beginning of this week, compensating for some of the declines it experienced since the end of last week's trading. Friday's economic data demonstrated the success of the British economy in avoiding recession and turning towards growth, as the Gross Domestic Product (GDP) in Britain recorded growth of 0.1% during the last quarter of 2022, while expectations indicated the stability of the economy without any change at 0.0%.

The British pound started the week with an increase of about 0.22% against the US dollar, trading near the levels of $1.2356.

Important technical levels for the GBP/USD pair

The GBP/USD pair has been moving in a wide-ranging sideways channel since mid-December 2022 on the daily timeframe. The upper limit of this channel is at the resistance level of 1.2450, while its lower limit and support level is at 1.1800. The pair is currently trading near the upper limit of the sideways channel, and it is likely to test the resistance level of 1.2450. If the pair manages to break above this level and prices remain steady, this may contribute to further upward movement towards the resistance levels of 1.2600-1.2660.

However, if the pair tests the upper limit of the sideways channel and fails to break above it, it is likely to return to decline and test the support level of 1.2270. If this support is broken, the pair may extend the decline to test the stronger support level around 1.2000, which, if broken, may extend the decline to the lower limit of the sideways channel at the level of 1.1800.