GBP/USD Forecast: Fresh highs on PM Johnson’s plan out of lockdown

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4083

UK PM Boris Johnson announced restrictions will be lifted in four steps.
The number of unemployed people in the UK is foreseen at 35K in January.
GBP/USD holds on to gains and could keep rallying in the next sessions.

The GBP/USD pair jumped to a fresh multi-year high of 1.4085, an almost three-year high, backed by the prevalent dollar’s weakness and the UK government’s plan to ease lockdown measures. UK Prime Minister Boris Johnson explained that restrictions will be eased in four steps, with a minimum of five weeks between each step. The final step, which will lift all social restrictions and allow all sectors of the economy to reopen, will begin no earlier than June 21.

The UK macroeconomic calendar will kick-start this Tuesday with the release of UK employment data. The ILO unemployment rate for the three months to December is foreseen at 5.1% from 5.0% previously, while average hourly earnings in the same period are seen rising. Also, the number of unemployed people is expected to have risen to 35K in January, vs 7K in the previous month.

GBP/USD short-term technical outlook

The GBP/USD pair trades in the 1.4070 price zone, and could continue rallying in the upcoming sessions. In the 4-hour chart, the 20 SMA accelerates north well below the current level and far above the larger ones, which also head higher. The Momentum indicator eases from overbought levels, but the pair holds near its daily highs. The RSI indicator, in the meantime, has stabilized above 70, without signs of upward exhaustion.

Support levels: 1.4040 1.3985 1.3930

Resistance levels: 1.4080 1.4120 1.4165

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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