- GBP/USD sustains the bounce above 1.3000.
- Cable’s near-term technical outlook points to further upside.
- UK annualized CPI seen steady at 1.5% in December.
GBP/USD looks to extend the bounce towards 1.3050 ahead of the UK CPI report, as broad-based US dollar weakness and bullish technical set up underpin the sentiment around the spot.
As for Wednesday’s trading so far, the cable is consolidating the bounce from three-week lows of 1.2954 below the 5-DMA at 1.3034. The cautious market mood ahead of the US-China phase trade deal details release and thereafter the signing ceremony remains a drag on the US dollar across its main competitors.
Meanwhile, the latest comments from the UK PM Johnson, denying Scottish PM Sturgeon’s request to hold another Scottish independence referendum, also keeps a check on the pound’s recovery, as it further fuels Hard Brexit concerns. Further, poor UK GDP data combined with increased BOE dovish expectations could continue to weigh.
Looking ahead, the pair risks further gains, as suggested by the short-term technical set up. “To start with, the flag breakout seen on the 15-minute chart indicates the minor pullback from the overnight high of 1.3033 has ended and the rally from 1.2975 has resumed. The breakout has opened the doors for 1.3080 (target as per the measured move method)”, Omkar Godbole, FXStreet’s Analyst explains.
Moreover, a beat on the UK annualized inflation figures could bolster the GBP/USD recovery. However, the major is likely to be influenced by the USD dynamics, in the face of the US-China phase one trade deal signing due later today at 1630 GMT.
GBP/USD Technical levels to consider
|Today last price||1.3030|
|Today Daily Change||0.0007|
|Today Daily Change %||0.05|
|Today daily open||1.3021|
|Previous Daily High||1.3034|
|Previous Daily Low||1.2954|
|Previous Weekly High||1.3213|
|Previous Weekly Low||1.3013|
|Previous Monthly High||1.3515|
|Previous Monthly Low||1.2896|
|Daily Fibonacci 38.2%||1.3003|
|Daily Fibonacci 61.8%||1.2985|
|Daily Pivot Point S1||1.2972|
|Daily Pivot Point S2||1.2923|
|Daily Pivot Point S3||1.2892|
|Daily Pivot Point R1||1.3052|
|Daily Pivot Point R2||1.3083|
|Daily Pivot Point R3||1.3132|
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.