GBP/USD Forecast: poised to extend its decline towards 1.2000

Valeria Bednarik FXStreet

The Pound shows little aims to recover ground, in spite of the good macroeconomic figures seen during these last days. Indeed, indicators have shown signs of economic improvement after the initial knee-jerk post Brexit's referendum, but those positive numbers are just the result of a cheaper Pound. The key here is that the up-tick in indicators won't be sustainable in time, particularly if the UK ends up getting a "hard-Brexit." And this is not something only Theresa May could decide or not, it also depends on the rest of the EU members that for now, have shown no intentions to offer soft conditions to the kingdom.

US data on the other hand, has been ok, not shockingly strong, but neither enough to prevent the US from rising rates sometime in the near term. In this scenario, the GBP/USD pair´s bearish trend is inevitable in the longer run. Shorter term, daily woes can push the pair temporarily higher, but as long as the price remains below 1.2335, chances of a recovery are pretty much null.

For this Friday, the technical picture favors the downside, given that in the 4 hours chart, the price is extending below its 20 SMA that anyway remains flat, while technical indicators head modestly lower within bearish territory, with limited momentum at this time of the day, as investors are waiting for US data.

The immediate support is last week's low at 1.2082, with a break below it supporting a slide down to the key 1.2000 level. Above 1.2200, the pair can advance towards the 1.2260 region, although selling interest is expected to contain the rally around this last.

View live chart of 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 stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.