GBP/USD Current price: 1.3928
- UK finance minister Rishi Sunak is likely to announce additional help for business.
- Markit to confirm that manufacturing output in the UK expanded in January at a solid pace.
- GBP/USD corrected extreme overbought conditions, further slides unclear.
The GBP/USD pair fell for a second consecutive day, closing the week in the red at 1.3928. A scarce UK macroeconomic calendar favored the slump, as there were no reasons to buy the pound. The market has already priced in better progress in coronavirus immunization in the UK, which could be translated into a sooner economic comeback. Profit-taking on the last trading day of the month may have also taken its toll after the pair reached an almost three-year high mid-week.
Over the weekend, news pointed out that UK finance minister Rishi Sunak would announce this week 5 billion pounds of additional grants to help businesses hit by the pandemic in his budget statement next Wednesday. Markit will release the final reading of the UK Manufacturing PMI this Monday, foreseen at 54.9. The country will publish January money data, with Mortgage Approvals expected at 96K.
GBP/USD short-term technical outlook
From a technical point of view, the GBP/USD pair is in a corrective decline. In the daily chart, the pair develops above bullish moving averages. The 20 SMA provides dynamic support at 1.3860, with a break below it opening the doors for a steeper decline. Technical indicators retreated sharply from overbought readings, maintaining their bearish slopes but within positive levels. In the 4-hour chart, the pair is developing below a bearish 20 SMA and just above a bullish 100 SMA. Technical indicators remain near oversold levels, the Momentum bouncing modestly, but the RSI maintaining its bearish slope.
Support levels: 1.3880 1.3830 1.3775
Resistance levels: 1.3965 1.4000 1.4040
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.