- The Pound Sterling has been under downside pressures over the past week and in fact since the start of 2020.
- This has been driven by three factors with respect to the GBPUSD Forex rate:
- A more dovish tone from at least three members of the Monetary Policy Committee of the Bank of England, including outgoing Governor Carney, with new voices for a possible rate cut being raised over the past weekend.
- A deterioration of UK data this week, in particular the GDP, Manufacturing and Industrial Production numbers.
- A firmer US Dollar across major currencies since the start of 2020.
- In addition, these negative factors have seen Cable or GBPUSD technically damaged (as below), which leaves risk for still further losses today, this week and potentially into the second half of January.
GBPUSD day trade outlook: Downside bias, despite bounce
A Tuesday dip below 1.296 support to just 1.2954, then a rebound, but still capped by the 1.3045 resistance barrier, to retain negative forces from Monday’s plunge through supports at 1.3012, 1.3000 and 1.2969, to leave the bias lower into Wednesday.
- We see a downside bias for 1.2954; a break below aims for key 1.2904, maybe 1.2882/79.
- But above 1.3045 targets 1.3097; above opens risk up towards 1.3123 and 1.3169.
GBPUSD intermediate-term outlook: We see an intermediate-term range theme defined by 1.2904 to 1.3284.
Upside risks: Above 1.3284 sets an intermediate-term bull trend and upside risk for and 1.3422, 1.3515, 1.3618 and 1.4000.
Downside risks: Below 1.2904 sets an intermediate-term bear trend and aims for 1.2768, 1.2516 and maybe 1.2197.
4 Hour GBPUSD Chart