GBP/USD Price Forecast: At critical long-term uptrend support after the GDP downing

  • GBP/USD has dropped below 1.30 following weak data and BOE dovishness.
  • It is challenging a two-month-old uptrend support line.
  • Downside momentum and the loss of the 50 SMA point to further falls.

Break or bounce? That is the question for the long-term pound/dollar traders who are eying the daily chart. GBP/USD has hit the uptrend support line for the fourth time – making line it even more significant. It has accompanied the currency pair since mid-November. 

GBP USD technical analysis daily chart January 14 2020

Weak Gross Domestic Product hit sterling for November, which showed a contraction of 0.3% against 0% expected. The Bank of England's fresh openness to cutting interest rates – coming before the data – also weighs.

Back to the chart, the bearish case relies on the loss of the 50-day Simple Moving Average. Moreover, downside momentum has deepened. Support awaits at 1.29, a round number that cushioned the pair in December, and 1.2820, which provided support in November.

The most significant support line is at 1.2775, which is the November low and also where the 200-day SMA meets the price. 

The bullish case rests with the fact that GBP/USD is holding onto this uptrend support line – at least for now – and that it is trading well above the 100 and 200-day SMAs.

Resistance awaits at 1.3105, which is where the downtrend resistance line hits the price. Next, we find 1.3205 and 1.3285, both recent peaks that form the trending cap: higher above, the election peaks of 1.3420 and 1.3510 tower above. 

The next significant release is UK Consumer Price Index, due out on Wednesday at 9:30 GMT. 

See UK inflation Preview: Cementing the rate cut or triggering a GBP/USD correction? Three scenarios

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD drops towards 1.1300 on dovish ECB headlines

EUR/USD is extending the drop towards 1.1300 after the ECB is debating over a potential increase in the APP at its meeting next week. The US dollar rebounds amid a cautious mood. Omicron, US-China woes keep investors on the edge.


GBP/USD battles 1.3200 amid Omicron jitters, USD rebound

GBP/USD is trading flat around 1.3200, struggling to capitalize on the overnight goodish rebound from a one-year low. Fresh COVID-19 jitters pushed back BoE rate hike expectations and undermined the pound. Resurgent USD demand further stalled aggressive bullish bets.


Gold eases towards $1,780 on resurgent USD demand

Gold remains on the back foot below $1,790 amid broad US dollar reboud. Market sentiment dwindles as virus-linked news battles geopolitical fears, Fed rate hike concerns. Friday’s US CPI becomes crucial as inflation expectations improve.

Gold News

Analysts believe Ripple could beat SEC lawsuit on one condition

Experts are weighing in on the possible closure of the payments giant's lawsuit with the SEC. Analysts predict that the payment giant's win in the SEC vs. Ripple case could push XRP to a new high.

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!