• US dollar turns lower after the speech from Fed’s Powell and ahead of Biden.
  • Pound recovers strength and helps GBP/USD to new multi-year highs.
  • Cable unable to make a run above 1.3700.

The GBP/USD jumped to 1.3709, reaching the highest intraday level since May 2018 and pulled back later. The move higher was boosted by a decline of the US dollar following Federal Reserve Powell's comments. He mentioned it is not time to talk about an exit strategy and warranted that the central bank will be very transparent when it starts to reduce QE. Market participants await US President-elect Biden stimulus package presentation. Wall Street was mixed, holding near record highs.

Economic data from the US came in weaker-than-expected with initial jobless claims rising unexpectedly to 965K, the highest since August. Market sentiment was unaffected. On Friday, economic data to be released includes trade and industrial production in the UK and retail sales and producer inflation in the US.

The pound recovered momentum on Thursday and also rose versus the euro. The UK's vaccination outlook is a positive development for the pound that could gain momentum if EUR/GBP breaks under 0.8860.

GBP/USD short-term technical outlook

The GBP/USD pair trades between 1.3650 and 1.3700. It is about to post the highest daily close in years, but it does not show yet strong signs of a break above 1.3700. On Thursday, the rebound gave the pound the needed momentum for a new test of the 1.3700/20 barrier. A consolidation above could trigger volatility and more gains. The positive tone will last while above 1.3610/20 (Dec 13 and 14 low). A slide below would target 1.3585 first, in a move that could extend to the 1.3545 support area.

Support levels: 1.3620 1.3545 1.3470

Resistance levels: 1.3710 1.3755 1.3755 1.3820

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD rises above 1.21 amid better market mood

EUR/USD has been extending its gains, recapturing 1.21 as the market mood improves. The German ZEW Economic Sentiment beat estimates with 61.8 points. Treasury Secretary nominee Janet Yellen's testimony is awaited.

EUR/USD News

GBP/USD clings to 1.36 ahead of Yellen's testimony

GBP/USD is edging above 1.36 as markets eagerly Treasury Secretary nominee Janet Yellen's testimony. The UK parliament is set to process the Brexit deal as Britain ramps up its vaccination campaign.

GBP/USD News

Gold recovers further from multi-week lows, climbs to $1845 region

Gold gained positive traction for the second consecutive session on Tuesday. A modest USD pullback was seen as a key factor that benefitted the metal. The risk-on mood, rallying US bond yields might cap gains for the commodity.

Gold news

Breaking: Ethereum explodes to new yearly high, validating upward price action

Ethereum has ascended to new yearly highs after breaking the recent peak achieved in January. The flagship altcoin is trading at $1,372 amid the push for gains eyeing $1,400. 

Read more

US Dollar Index: Downside pressure alleviated above 91.00

DXY met sellers in the 91.00 neighbourhood on Monday and now retreats to the 90.50 region on turnaround Tuesday.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures