- GBP/USD rejected at 1.3400, dives to session lows below 1.3300.
- The pound struggles to hold at multi-month highs as the US dollar picks up.
- GBP/USD may challenge 1.3482 – CitiBank.
Sterling’s reversal from 1.3400 area, its highest level since early September, has been contained at 1.3265, and the pair is attempting to consolidate at multi-month highs past 1.3315.
Brexit hopes and COVID-19 vaccine support the GBP
The pound accelerated its uptrend from mid-November lows at 1.3100 on Monday’s early trade, breaking through November’s peak at 1.3315. The promising results of the trials of AstraZeneca’s COVID-19 vaccine and renewed hopes of a Brexit deal with the EU have fuelled pound's demand during the London trading session.
The upbeat UK Flash PMIs, which advanced a shorter than expected contraction in November, and a weak USD, weighed by hopes od further monetary easing by the Federal Reserve, have contributed to extend pound’s bullish momentum
The rally, however, was halted right above 1.3400 and the pair plunged beyond 100 pips during the US trading session, amid a strong dollar recovery. The upbeat preliminary US PMI figures, anticipating a better-than-expected performance of the manufacturing and the services sectors in November have increased confidence in the US economy, boosting demand for the USD.
GBP/USD may challenge 1.3482 – CitiBank
From a wider perspective, The FX analysis team at CitiBank remains optimistic about the mid-term outlook for the pound, pointing out to the 1.3482 target: “Going forward, widespread distribution of a vaccine, and an agreement on a Brexit deal can support GBP. Global economic recovery in 2021 as a result of a vaccine could see the UK begin to catchup. This also reduces the probability of the MPC moving policy rates into negative territory (…) GBPUSD found support at 100dMA. The pair may challenge 1.3482, with support at 1.2982.”
Technical levels to watch
|Today last price||1.3331|
|Today Daily Change||0.0038|
|Today Daily Change %||0.29|
|Today daily open||1.3293|
|Previous Daily High||1.3298|
|Previous Daily Low||1.3247|
|Previous Weekly High||1.3312|
|Previous Weekly Low||1.3166|
|Previous Monthly High||1.3177|
|Previous Monthly Low||1.282|
|Daily Fibonacci 38.2%||1.3278|
|Daily Fibonacci 61.8%||1.3266|
|Daily Pivot Point S1||1.3261|
|Daily Pivot Point S2||1.3228|
|Daily Pivot Point S3||1.321|
|Daily Pivot Point R1||1.3312|
|Daily Pivot Point R2||1.333|
|Daily Pivot Point R3||1.3362|
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.