GBP/USD consolidates around 1.2300
|GBP/USD is about to end Thursday with modest gains, making a correction after yesterday’s sharp decline. Cable received some support from the decline of the EUR/GBP pair after Draghi’s press conference.
The US dollar is about to end the day on a weak note. As equity prices decline in Wall Street, the greenback is erasing gains and pushing GBP/USD toward the upper limit of the intraday range.
Currently, the pair trades at 1.2320/25. It has been hovering around 1.2300 during the last hours, relatively steady, making a consolidation as analysts start to focus on the first day of the Trump administration.
GBP/USD outlook
“Pound traders are still trying to asset the implications of latest PM May speech, in which she confirmed the government's choice of a "hard-Brexit," but with the most conciliatory tone ever. The absence of macroeconomic releases helped keep the pair subdued intraday, with market's attention now focusing in the UK December Retail Sales, to be released this Friday”, said Valeria Bednarik, Chief Analyst at FXStreet.
From a technical perspective, according to Bednarik, the pair is currently in a short-term consolidative phase according to the 4-hour chart, “with the upside limited by the 200 EMA around 1.2330, and the RSI indicator flat around 56, but the 20 SMA maintaining its upward slope below the current level, limiting chances of a strong downward move”.
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