For the fifth consecutive day, the GBP/USD is ranging between 1.3330 and the resistance at 1.3420, and it seems that the Pound is 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, as the gains didn’t go beyond the 1.3420 level, where the pair moved naturally for several sessions recently. The pair is stable at the time of writing around 1.3370, and it is clear that it is influenced strongly and effectively by the consequences and path of the Brexit negotiations.
It seems clear from the daily chart below that the moves and performance of the GBP/USD are range bonded, and that the pair is waiting for any updates about Brexit, and the US Tax Law. As wildly expected, Bank of England maintained the 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 Pounds to support the UK economy which faced shocks since the country’s vote to leave the EU. The US growth rate was lower, against expectations, and the unemployment claims increased, while the only positivity was from the Philly Manufacturing Index and the New House sales.
Technically: GBP/USD will be very bearish in case it is established somewhere below 1.3300, and the following support levels then be levels confirming the bearish trend: 1.3100 and 1.3220. On the bullish side, 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 or the US due to holidays. The market will monitor any updates regarding the BREXIT negotiations, as well as, Trumps internal and external policies.