GBP/USD analysis: dollar's weakness saved Pound, for now

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3538

Brexit talks to resume late January, tougher road ahead.
Dollar's weakness prevents the Sterling from plummeting, but upside limited.

The GBP/USD pair posted a lower low and a lower high for a fourth consecutive day, but bounced from 1.3457, to end the day with gains around 1.3540. The Pound has been quite vulnerable ever since the week started, despite reporting on Wednesday that manufacturing output expanded at its fastest rate since early 2008, as a new round of Brexit talks looms. Fears that things will get tougher from now on, and that the effects of Brexit will hit hard the UK economy, dented demand for Sterling. The UK macroeconomic calendar had nothing to offer this Thursday and will remain empty for the rest of the week. The pair bounced in the US session following softer-than-expected American data, with technical readings in the 4 hours chart offering now a neutral stance, as the price has barely settled above a horizontal 20 SMA, while technical indicators bounced from oversold readings to turn flat around their mid-lines. Dollar's weakness prevents the pair from plummeting, but the potential upward remains limited, with only a steady recovery above 1.3612, this year high, favoring a more sustainable advance ahead.

Support levels: 1.3520 1.3475 1.3430

Resistance levels: 1.3560 1.3590 1.3615

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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.

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