Weak upward bounce for the GBP/USD, which is the lowest gainer with a retreat of the US dollar, as gains didn’t go beyond 1.3429, before establishing around 1.3390 at the time of writing. Generally, the steadiness of the GBP/USD on the daily chart warns, technically, that the pair might experience a price explosion determining the direction strongly, with a drop being closer to the pair’s performance in case it moved below 1.3300. The US Index dropped to 92.96 DXY, and it =seems that the pound is really exhausted at the time when major currencies made gains against the greenback, taking advantage of the pressure on the dollar after the US tax cut bill, the GBP/USD’s bounce was not strong, and it clear that it is influenced strongly and effectively by the consequences and path of the BREXIT negotiations.
The negotiations entered the second stage; the Trade Relations, after an almost done deal regarding the borders with Ireland. As wildly expected, Bank of England maintained by consensus of the monetary policy committee, led by Carney, the current monetary policy of the bank with interest rate at 0.50% and the asset purchase program worth 435 billion pound to support the UK economy which faced shocks since the country’s vote to leave the EU. Yesterday, there was an announcement about the US consumer confident, which retreated, but still around its highest levels for 17 years.
GBP/USD will be very bearish in case it is established somewhere below 1.3300, and then following levels will provide support: 1.3100 and 1.3220, and will be confirming the bearish trend. On the bullish side, the nearest resistance levels are currently at 1.3400 and 1.3475, and I still prefer selling at each upward bounce. In light of market closer due to holidays this week and early next week for Christmas and New Year, traders need to be alert of price gaps due to markets coming back in interrupted form sometimes, and it is better to avoid trading until the markets are fully back to normal.
On the economic data front:
This pair is not expecting any important data today, from the UK. From the US, there will be an announcement for the US unemployment claims, the good’s trade balance, Chicago PMI, and the US crude inventories . The market will monitor any updates regarding the BREXIT negotiations, as well as, Trumps internal and external policies.