The Great Britain Pound (GBP) inched higher against the US Dollar (USD) on Friday, increasing the price of GBPUSD to more than 1.4200 following some key economic events. The technical bias remains bullish because of a higher low in the recent downside move.
GBP/USD Technical Analysis
As of this writing, the pair is being traded near 1.4249. A hurdle may be noted around 1.4262 (a major horizontal resistance zone) ahead of 1.4300 (a psychological level) and then 1.4343 (another major resistance area).
On the downside, a support can be noted around 1.3000 (a psychological number) ahead of 1.2634 (the low of the last major downside move) and then 1.2500 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart. The technical bias shall remain bullish as long as the 1.2700 support area is intact.
US Home Sales
The Commerce Department said new home sales declined 9.3 percent to a seasonally adjusted annual rate of 625,000 units last month. The percentage decrease was the largest since August 2016. Unseasonably cold temperatures at the end of December probably also hurt sales.
Economists polled by Reuters had forecast that new home sales, which account for 10.1 percent of the housing market, would tumble 7.9 percent to a pace of 679,000 units last month.
Sales plunged 9.8 percent in the South last month after a 6.6 percent surge in November that was tied to rebuilding after the devastation caused by Hurricanes Harvey and Irma. They fell 10 percent in the Midwest and dropped 2.4 percent in the Northeast – both regions experienced unusually cold weather in late December. In the West, sales fell 9.5 percent.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.