GBP/USD Forecast: Pound Sterling could face next hurdle at 1.2530
- GBP/USD trades at a weekly high above 1.2500 in the European session on Wednesday.
- The pair could face stiff resistance at 1.2530.
- Investors await key macroeconomic data releases from the US.
After posting gains for two consecutive days, GBP/USD continues to stretch higher and trades at a new weekly high above 1.2500 on Wednesday. The technical outlook highlights a buildup of bullish momentum as market focus shifts to key macroeconomic data releases from the US.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.46% | -1.01% | -1.33% | -2.85% | -1.13% | -1.60% | -1.48% | |
| EUR | 0.46% | -0.16% | 0.45% | -1.13% | -0.23% | 0.15% | 0.27% | |
| GBP | 1.01% | 0.16% | -0.50% | -0.98% | -0.07% | 0.30% | 0.43% | |
| JPY | 1.33% | -0.45% | 0.50% | -1.54% | 0.35% | 0.67% | 0.49% | |
| CAD | 2.85% | 1.13% | 0.98% | 1.54% | 0.67% | 1.29% | 1.42% | |
| AUD | 1.13% | 0.23% | 0.07% | -0.35% | -0.67% | 0.37% | 0.49% | |
| NZD | 1.60% | -0.15% | -0.30% | -0.67% | -1.29% | -0.37% | 0.13% | |
| CHF | 1.48% | -0.27% | -0.43% | -0.49% | -1.42% | -0.49% | -0.13% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The US Dollar (USD) weakened against its major rivals on Tuesday as the recovery seen in Wall Street's main indexes pointed to an improving risk mood. Moreover, the US Bureau of Labor Statistics announced that JOLTS Job Openings declined to 7.6 million in December, falling short of the market expectation of 8 million and putting additional weight on the USD's shoulders.
Early Wednesday, US stock index futures trade in negative territory. The USD, however, struggles to stay resilient against its rivals. Nevertheless, GBP/USD could have a hard time holding its ground in the second half of the day in case safe-haven flows dominate the action.
Later in the day, the US economic calendar will feature ADP Employment Change and the ISM Services PMI data for January.
Investors expect payrolls in the private sector to rise by 150,000, up from 122,000 in December. A reading above the market forecast could support the USD with the initial reaction. The ISM Services PMI is seen edging slightly higher to 54.3 in January from 54.1. In case this data comes in below 50 and shows a contraction in the service sector's business activity, the USD could come under renewed selling pressure and open the door for another leg higher in GBP/USD.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays above 60, confirming the bullish stance. On the upside, 1.2530 (Fibonacci 61.8% retracement of the latest downtrend) aligns as immediate resistance before 1.2600 (round level, static level) and 1.2650 (Fibonacci 78.6% retracement).
Looking south, first support could be spotted at 1.2500 (round level, static level) ahead of 1.2450 (Fibonacci 50% retracement) and 1.2400 (200-period Simple Moving Average).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
