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GBP/USD Price Forecast - British Pound Pulls Back

GBP/USD is trading sideways in the Thursday session. Currently, the pair is trading at 1.3107, up 0.01% on the day.

Pound Steady after Iran Strikes Back

The U.S. strike which killed an Iranian general triggered some volatility from the pound at the start of the week, but the currency has settled down, as GBP/USD trades just above the 1.31 line. After Iran retaliated by launching missiles at two U.S. bases in Iraq, there are hopes that the crisis will now de-escalate. Still, the situation in the Persian Gulf remains tense, and traders should act with caution as the currency markets remain unsettled. A sudden flare-up in the region could spook investors and trigger further volatility in the markets.

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Lawmakers Debate Brexit Bill

Overshadowed by the U.S-Iran crisis, British lawmakers have begun debate over the Brexit bill. The bill is expected to easily pass through parliament, as Prime Minister Johnson has a comfortable majority in parliament. However, there are dark clouds just around the corner. Brexit is scheduled for January 31st, followed by a transition period until the end of 2020. Johnson wants to wrap up a trade agreement with the EU by then, but the Europeans have warned that the timetable is far too short to reach a comprehensive agreement. If the sides are unable to agree on a timetable, tensions could rise and nervous investors could lose confidence in the pound.

Technical Analysis

The 1.3150 line is an immediate resistance line. Above, we find resistance at 1.3220, followed by the round number of 1.3300. On the downside, there is support at 1.3050. The next support level is at 1.30, which has psychological significance.

GBP/USD 1-Day Chart


Pacific Currencies – Daily Summary


The Chinese yuan is flexing some muscle, as USD/CNY continues to move lower. Currently, the pair is trading at 6.9282, down 0.23% on the day. The pair has not touched this level since late July.

In economic news, Chinese consumer inflation remained steady at 4.5% in December, after hitting its highest level since 2012 in the November release. Still, this was shy of the forecast of 4.7 percent.


AUD/USD is steady on Thursday. Currently, the pair is trading at 0.6871, down 0.06% on the day. Australia’s trade surplus widened to A$5.80 billion in November, up from A$4.50 billion a month earlier. This beat the estimate of A$4.10 billion.


NZD/USD is currently trading at 0.6633, down 0.21% on the day. On the fundamental front, ANZ Commodity Prices declined 2.8% in December, its first decline in five months.

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