GBP/USD: still heading toward 1.4000 and beyond

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3951

UK encouraging data back Pound´s recovery.
GBP/USD pair ready to clear the 1.4000 mark.

The GBP/USD pair traded as high as 1.4002 at the beginning of the day, its highest since the Brexit referendum, but eased during Asian trading hours and early London, falling down to 1.3915 before recovering some ground currently around 1.3950. Minor data coming from the UK this Tuesday was generally encouraging as public sector net borrowing fell sharply in December, helped by a large credit from the EU and surging VAT receipts. Also, the CBI survey indicated that manufacturing activity strengthened this month, with the index resulting at 14 vs. the expected 13. The US session will bring the local Richmond Fed Manufacturing Index for January and the EU consumer confidence index.

Fading enthusiasm over the greenback helps the pair to resume its advance, and intraday technical readings support the ongoing recovery, as in the 4 hours chart, the pair bounced by the pip from a bullish 20 SMA, while technical indicators are also in recovery mode, the Momentum from its 100 level and the RSI within positive territory, both still below its previous weekly highs. The pair is currently surpassing its previous highs, with scope now to retest the mentioned high, and even extend its gains beyond it, should dollar's decline resumes.

Support levels: 1.3915 1.3860 1.3820

Resistance levels: 1.4000 1.4040 1.4075

View Live Chart for the GBP/USD

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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