GBP Stronger Following UK GDP Beat

GDP Beats ForecastsGBP has seen better demand today on the back of the latest UK GDP data released this morning. A gloomy report from the NIESR yesterday weighed on GBP sentiment ahead of the release. However, with the preliminary Q2 GDP data showing a 0.2% rise, against the 0% result expected, GBP has been higher today. The data suggests that the UK economy avoided recession once again last quarter, despite growth still being very weak.Weak UK Growth OutlookWith Q1 seeing growth of just 0.1%, economic activity is still looking very fragile in the UK. Yesterday, the NIESR released a report disclosing its view that the UK economy will likely avoid recession this year but has around a 60% chance of falling into negative growth next year as a result of the impact of ongoing BOE tightening, inflation and other elements such as Brexit and the Russia-Ukraine war. The UK economy has been among the worst performers in the G7 this year. Looking ahead today the group will release an official GDP estimate which will be closely watched on the back of yesterday’s report.Technical ViewsGBPUSDThe correction lower in GBPUSD has seen the market breaking below the bull channel lows with price now testing the 1.2659 support level. This is a key support area for the market and should we break below here, focus will shift to 1.2437 next. To the topside, 1.2992 is the key level for bulls to get back above, putting the focus back on 1.3277 above.