The GBP/USD currency pair on Friday pulled back after setting a new 2-week high of 1.3170 to trade at around 1.3056. The currency pair has been on a bullish run since the start of last week and recovered from a major pullback early this week.
The pair is still pegged above the 100-hour and the 200-hour SMA lines despite today’s pullback. These could act as crucial support levels in the foreseeable future.
GBP/USD Fundamentals Overview
From a fundamental perspective, the GBP/USD currency pair is trading at the back of a relatively quiet period in both the US and the UK markets. Last week was a lot more eventful, but still, some key data was released in the last few days. On Tuesday, the UK ILO unemployment rate for the 3 months ended November last year came in line with expectations at 3.8% unhanged from the preceding 3-month period.
Average earnings including bonuses for the same period beat the expected change of 3.1% with 3.2%. On the other hand, earnings ex-bonuses were in line with expectations with a change of 3.4% down from 3.5% in the preceding period. On Friday, the UK Markit Manufacturing PMI and the Services PMI beat the expectations of 48.9 and 51 with 49.8 and 52.9, respectively.
In the US, the preliminary Markit Manufacturing PMI missed the expectation of 52.5 with 51.7. On the other hand, the Services PMI and the PMI Composite beat 52.9 and 52.5 with 53.2 and 53.1, respectively.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair appears to be trading in an ascending channel. This indicates a short-term bullish bias in the market sentiment. The currency pair has recently bounced off both the trendline support and the trendline resistance. This shows that both the bulls and the bears are battling for control.
Therefore, the bulls will be targeting short-term profits at around 1.3146 or higher at 1.3200. On the other hand, the bears will be looking to pounce by targeting profits at around 1.3062 or lower at 1.3011.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair appears to be experiencing significant bearish pressure. The pair faces strong resistance around the 1.3100 level but there is still some room up top for the bulls to target. The latest pullback has pushed the pair off overbought levels of the RSI indicator in the daily chart.
Therefore, the bulls will be targeting long-term profits at around 1.3290 or higher at 1.3515. On the other hand, the bears will look to retake control by targeting profits at around 1.2944 or lower at 1.2771.