GBP/USD Forecast: Bulls not ready to give up

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3714

The number of new daily coronavirus contagions in the UK keeps retreating.
Focus now shifts to the January preliminary estimates of Markit PMIs.
GBP/USD consolidates gains around 1.3700, the rally could continue.

The GBP/USD pair hit 1.3745, its highest since May 2018, ending Thursday with gains above the 1.3700 level. The pair was underpinned by the prevalent risk-appetite, which was more notorious during the European session. The positive sentiment eased as the day went by, with US indexes finishing the day mixed, but not far from their opening levels. Meanwhile, the number of new daily coronavirus contagions and deaths in the UK continues to retreat. Nevertheless, the government is considering extending restrictive measures while escalating vaccine-induced immunization.

The UK didn’t publish relevant macroeconomic data but will release this Friday, January GFK Consumer Confidence, foreseen at -29 from -26 in the previous month. Markit will release the preliminary estimate of the January Manufacturing PMI, expected at 54, and the Services index for the same month, foreseen at 45 from 49.4 in the previous month.

GBP/USD short-term technical outlook

The GBP/USD pair is hovering a few pips above the 1.3700 threshold, neutral-to-bullish in the near-term. The 4-hour chart shows that technical indicators have lost bullish momentum but also that they remain within positive levels. Meanwhile, the pair keeps developing above all of its moving averages, with the 20 SMA accelerating north above the larger ones.

Support levels: 1.3670 1.3620 1.3585

Resistance levels: 1.3745 1.3790 1.3830

View Live Chart for the GBP/USD

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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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