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GBP/USD – Pound Improves to 1.31 in Thin Holiday Trade

By: 
Kenny Fisher
GBP/USD

Thin markets during the holiday has not deterred the British pound, which continues to make headway against the U.S. dollar. GBP/USD has posted gains for a fourth successive day and is back above the 1.31 line.

GBP/USD continues to move upwards. Currently, the pair is trading at 1.3120, up 0.31% on the day. The sole event on the calendar is High Street Lending, which is projected to tick higher to 41.3 thousand, up from 41.2 thousand in the previous reading.

Positive December for Pound

It’s been an up-and-down month of December for the British pound. Prime Minister Johnson’s convincing election win restored some badly-needed political stability, which has been sorely lacking since the shock Brexit vote back in June 2016. The pound soared after the election results, jumping above the 1.35 line. The gains proved to be short-lived, however, as the pound retreated and fell below the 1.30 line. Investors focused on the day after Brexit, when London and Brussels are set to commence an uneasy transition period, when negotiations will begin on a new free-trade relationship between the two sides. The pound has regained some strength and is up 1.5% in December.

 

Technical Analysis

GBP/USD tested resistance at 1.3100 on Friday, and this line is again being challenged on Monday. Above, there is resistance at 1.3180, which is protecting the 1.32 level. On the downside, we find support at 1.3030, followed by the round number of 1.30.

GBP/USD 1-Day Chart

 

Pacific Currencies – Daily Summary

USD/CNY

USD/CNY remains below the 7.00 line, which has psychological significance. Currently, the pair is trading at 6.9854, down 0.14% on the day. There is support at 6.98, which was tested in the Asian session. Below, 6.9700 is the next support level. We could see stronger movement from the yuan on Tuesday, when China releases Manufacturing PMI, which is expected to remain at 50.1, which points to stagnation.

AUD/USD

AUD/USD enjoyed a good week, posting gains of 1.1 percent. The Aussie took advantage of a broadly lower U.S. dollar. Currently, AUD/USD is trading at 0.6986, up 0.06%. The pair is pressing on the symbolic level of 0.7000, which has held in resistance since mid-July.

NZD/USD

With a bank holiday in New Zealand on Monday and Tuesday, traders can expect a slow start to the week for the New Zealand dollar. NZD/USD gained 1.4% last week, and December is set to be the pair’s best month of the year – currently, NZD/USD is up 4.5% this month.

About the Author

Kenny Fisherauthor

Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.

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