The GBP/USD ascends beyond 1.2700 following the release of UK data.
FUNDAMENTAL OVERVIEW:
After a subdued Asian session, GBP/USD continued its rebound, surpassing 1.2700 during Thursday’s European trading hours. The UK S&P Global/CIPS Services PMI was upwardly revised for December, contributing to the strengthening of Pound Sterling. Attention now turns to the upcoming US data.
In the face of a risk-averse market atmosphere and ongoing strength in the US Dollar (USD), GBP/USD recorded marginal increases on Wednesday. As of early Thursday, the pair continues its gradual ascent, approaching the 1.2700 level.
The USD gained strength in the middle of the week, supported by the hawkish tone in the minutes of the Federal Reserve’s December policy meeting and a significant drop in Wall Street’s main indexes. Despite these factors, GBP/USD remained resilient throughout the day. The notable decline in EUR/GBP on Wednesday indicated that Pound Sterling successfully attracted capital outflows from the Euro, maintaining its strength against other currencies.
Investors will closely monitor Wall Street, as major US equity indexes experienced a roughly 1% decline on Wednesday. In early Thursday trading, US stock index futures show modest gains for the day. If there is an improvement in risk sentiment after the market opens, it might pose challenges for the USD to attract demand, potentially supporting GBP/USD in the latter part of the day.
GBP/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
GBP/USD is currently trading within an up channel.
GBP/USD is positioned above 20&50 in the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 1.2739
Immediate support level: 1.2633
HOW TO TRADE GBP/USD
After a significant decline, GBP/USD formed a double bottom, initiating an upward trend with higher highs. Currently, GBP/USD is approaching a key resistance zone, and if breached, further upside movement can be anticipated.
TRADE SUGGESTION- STOP BUY– 1.2783, TAKE PROFIT AT- 1.2972, SL AT- 1.2678.