GBP/USD analysis: bearish potential increased after latest developments

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3508

Pound hit by Construction PMI, services index to be key this Thursday.
GBP/USD decline could extend on renewed selling interest below 1.3500.

The GBP/USD pair trimmed all of its Tuesday's gains and entered negative territory for the week, hitting a daily low of 1.3494 early US session, amid combined strong US data with a poor UK macroeconomic reading. In the UK, the December Markit Construction PMI came below expected, printing 52.2 from previous 53.1, also missing expectations of 52.5, as a robust raise in residential building was offset by falling work on commercial projects and stagnating civil engineering output, according to the official release. The UK will release its November money figures this Thursday, alongside with the December Markit Services PMI. This last is expected at 53.8 and will have a larger influence on prices that money data, as another miss will likely send the pair to fresh weekly lows. The pair is a few pips above the 1.3500 figure and the 4 hours chart shows that it is poised to extend its decline on a break below the mentioned daily low, as its developing below its 20 SMA that anyway maintains a bullish slope, while technical indicators are breaking through their mid-lines, with limited bearish strength. A recovery beyond 1.3560, on the other hand, will take off the downward pressure, favoring a recovery toward the 1.3650 region.

Support levels: 1.3495 1.3450 1.3410

Resistance levels: 1.3560 1.3610 1.3655

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.