GBP/USD Forecast: Painful advance not meant to continue

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2965

European Parliament agreed that the UK needs to change rules before discussing a deal.
UK macroeconomic calendar with nothing relevant to offer the next days.
GBP/USD advanced for a third consecutive day, retreated from near 1.3000.

The GBP/USD pair has advanced for a third consecutive day, although it remains below the 1.3000 threshold. As it happened ever since the week started, the pair’s advance has more to do with the broad dollar’s weakness than with a sudden interest for the Pound. In fact, the UK didn’t release macroeconomic data this Wednesday, while the Brexit front continued to provide negative news. The European Parliament agreed that any deal must respect a “level playing field” by updating its rules to equal those of the Union. UK PM Johnson has ruled out the EU’s proposed “dynamic alignment” of EU-UK laws.

The UK macroeconomic calendar will remain light for the rest of the week, and will only publish this Thursday the RICS Housing Price Balance for January seen up by 3.0% following a 2.0% decline in the previous month.

GBP/USD short-term technical outlook

The GBP/USD pair offers a mildly bullish stance in the short term, although the suffered advance seen this week hardly supports further gains ahead. In the 4-hour chart, the pair has spent the day above its 20 SMA, which aims marginally higher at around 1.2930, but remains far below the larger ones. Technical indicators have eased from their highs but stabilized within positive levels, somehow indicating absent selling interest. Nevertheless, chances of a continued advance seem limited amid mounting Brexit-related tensions.

Support levels: 1.2945 1.2900 1.2865

Resistance levels: 1.3000 1.3030 1.3075

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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