GBP/USD Forecast: Sterlings fails to break key support with sideways trend intact

The GBP/USD is trading sideways during the second week of 2018 after rising as high as $1.3615 last week. The slide lower was driven by the upmove exhaustion and the political jitters with the UK government reshuffling.

While correcting lower the GBP/USD failed to break the important support level of $1.3480 representing 50% Fibonacci retracement line of recent move higher from $1.3340 to $1.3615.

With technical oscillators like Momentum, Relative Strength Index and Slow Stochastics turning higher, the short-term outlook remains neutral although the prevailing trend is bearish.

As the Bank of England’s credit survey is unlikely to provide stimulus to currency traders, the short-term target remains at $1.3480 with breaks below targeting $1.3450 level.

The UK Prime Minister Theresa May is set to meet finance leaders of London City on Thursday for talks about Brexit related issues. Before key inflation and labor market data next week, the GBP/USD is set to move sideways against the US Dollar.

GBP/USD 15 minutes chart

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