The British pound picked up some support against the Norwegian krone in the early Monday session following upward revisions to the third-quarter GDP data on Friday.
According to the Office for National Statistics, the final GDP reading showed that economic output rose 0.4% in the third quarter, slightly above market forecasts of a 0.3% rise. This represents an upward revision of 0.1 percentage points from the first quarterly estimate and reflects the inclusion of VAT turnover data.
While government expenditure weighed on the third-quarter GDP, services, construction, and production remained strong contributors to growth which more than offset lower government spending. On an annual basis, the UK GDP rose by 1.1% in Q3.
The latest Commitment of Traders report showed a strong increase in long positions in the pound among non-commercial traders. In the week through December 17, traders cut their bearish bets by $770 million and added $601 million to their bullish bets, taking the net short positioning to only $470 million. Note that the shift in sentiment came in the week after the Conservative Party won a decisive majority in the Parliament.
The upcoming trading week will likely contribute to choppy price action as the holidays are approaching. There are no market reports of note coming from the UK or Norway in the week ahead.
From a technical standpoint, the GBP/NOK pair is finding support at an important horizontal level that aligns with the November 8 low of 11.66, forming a reversal candlestick pattern.
Thinning liquidity in the markets may add to the pair’s inertia and push the pound further to the upside on technical trading, especially after the strong downturn in the pair last week. As of 7:05 a.m. London time, the krone traded at 11.6850 against the pound.
