GBP/USD Forecast: Pound needs a fresh catalyst

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3569

UK Construction output remained in expansion territory in December, according to Markit.
Coronavirus contagions in the UK receded for the first time this week.
GBP/USD neutral-to-bearish in the near-term could accelerate its slide.

The GBP/USD pair ended the day in the red around 1.3570, undermined by renewed dollar’s demand and the absence of UK news that could provide the pound with directional impulse. The currency remained under pressure after the latest total lockdown imposed by the government spurred concerns about potential economic fallout. This Thursday, the UK reported 52,618 new coronavirus cases, the first time the figure dropped this week, although the death toll reached a record of 1,162.

Markit published the December UK Construction PMI, which missed the market’s expectation and contracted to 54.6. On Friday, the UK will release Halifax House Prices.

GBP/USD short-term technical outlook

The GBP/USD pair is at risk of extending its decline. The 4-hour chart shows that the pair met sellers around a bearish 20 SMA while holding above a bullish 100 SMA, this last around 1.3515. Technical indicators remain within negative levels but lack directional strength. Still, the near-term picture favors another leg south, although with limited scope amid intrinsic dollar’s weakness.

Support levels: 1.3515 1.3470 1.3420

Resistance levels: 1.3620 1.3660 1.3710

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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