GBP/USD holds onto weekly gains, near 1.2500

Dollar ends a positive weekly streak across the board, even as risk aversion prevails.
Pound offers signs of life, rebounds more than 200 pips.
GBP/USD could correct further, considering magnitude of recent slide.

Matías Salord FXStreet

The GBP/USD is moving sideways on Friday, consolidating slightly below 1.2500. The pair remained steady even as stocks in Wall Street turned negative. Risk aversion is offering no boost to the dollar.

The pound is rising versus the US dollar for the first time in five weeks as it recovers from the lowest level in almost two years and following a 900 pips slide. The main trend is still bearish for GBP/USD. The pair moved off YTD lows giving signs of an interim bottom. The recovery appears to have room to go, particularly is financial tensions across global markets ease.

Technical outlook

The GBP/USD pair tested the 1.2540 resistance, where the Fibonacci 23.6% retracement of the downtrend that started in late March is located, before going into a consolidation phase on Friday, noted Dwani Mehta, analysts at FXStreet. “On a bullish note, the pair managed to close above the 21 DMA for the first time since March 22 and the Relative Strength Index (RSI) indicator on the daily chart rose to 50.”

According to Mehta, in case 1.2450 holds as support in the near term, GBP/USD could test 1.2540 and eye 1.2630 as its next bullish target. “A daily close above the latter could attract buyers and open the door for additional gains toward 1.2750 (Fibonacci 38.2% retracement).”

Technical levels

GBP/USD

Overview
Today last price	1.2486
Today Daily Change	0.0020
Today Daily Change %	0.16
Today daily open	1.2466

Trends
Daily SMA20	1.2453
Daily SMA50	1.2839
Daily SMA100	1.3167
Daily SMA200	1.3368

Levels
Previous Daily High	1.2525
Previous Daily Low	1.2337
Previous Weekly High	1.2406
Previous Weekly Low	1.2155
Previous Monthly High	1.3167
Previous Monthly Low	1.2411
Daily Fibonacci 38.2%	1.2453
Daily Fibonacci 61.8%	1.2409
Daily Pivot Point S1	1.2361
Daily Pivot Point S2	1.2256
Daily Pivot Point S3	1.2174
Daily Pivot Point R1	1.2548
Daily Pivot Point R2	1.263
Daily Pivot Point R3	1.2736

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.