Under pressure but above 1.3640 / 50 support area

Current price: 1.3669

  • The UK January Markit Manufacturing PMI was revised up to 54.1.
  • The coronavirus situation in the UK continues to improve, but the lockdown continues.
  • GBP / USD bearish potential increased, but further declines are not yet clear.

GBP / USD fell to 1.3655 amid persistent demand for the dollar, rebounding modestly ahead of the daily close. The pound was lower despite mostly encouraging data from the UK, as mortgage approvals rose to 103,381 in December, while consumer credit in the same month improved to £ -0.965 million. Additionally, the Markit Manufacturing PMI for January was revised to 54.1 from a preliminary estimate of 52.9.

Meanwhile, the coronavirus situation in the UK continues to improve, as vaccination accelerates and the number of new cases declines. Still, the country remains closed until at least March 8, when schools are expected to reopen. The UK macroeconomic calendar has little to offer until Thursday, when the BOE will announce its monetary policy decision.

GBP / USD short-term technical outlook

GBP / USD is currently trading in the 1.3670 price zone, from neutral to bearish in the short term. The 4-hour chart shows that the pair has encountered buyers around a flat 100 SMA, but is also developing below a directionless 20 SMA. The 100 SMA stands at 1.3652. Meanwhile, technical indicators lack directional strength, with Momentum around their 100 level and RSI stable at 46. A daily rising trend line from the December 22 low is located at 1.3645, reinforcing the support area around of 1.3650.

Support levels: 1.3650 1.3605 1.3560

Resistance levels: 1.3715 1.3760 1.3810

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