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GBPUSD Wednesday
GBPUSD Wednesday

The British Pound is also mirroring common currency’s price action today and is trading range bound near recent highs on broad based dollar weakness. The US Greenback is trading bearish against all major global currencies pressured by a cocktail of negative factors including heightened concerns over a partial U.S. government shutdown and tension between the White House and the Federal Reserve. Fears of a U.S. and global economic slowdown have sent U.S. 10-year yields tumbling by around 25 basis points in December, adding to the increasing strain on the dollar and further darkening its outlook. Moderating U.S. growth and political tensions are negative for the dollar which is expected to provide support for Pound bulls in immediate and near future market hours.

Holiday Thin Market Capped GBP Bull’s From Breaching Key Resistance Level

As of writing this article, GBPUSD pair is trading at 1.2710 up by 0.25% on the day. With the absence of the economic data and Brexit-related headlines amid holiday thin market that pair has very little volatility during today’s trading session. As year end holiday season mood is highly prevalent in market, investors maintain cautious tone despite lack of high impact news on cues which paint bearish picture for both GBP & USD once usual trading activity resumes on first week of January 2019. On release front, calendar has no major releases during US markets hours while UK markets are closed owing to Boxing Day celebrations effectively capping any chance of short term profit opportunities leaving the pair to continue its subdued price action.

When looking from technical perspective, the pair has breached major resistance level of 1.27 handle on broad based weakness but failed to breach resistance at 1.275 handle moving down significantly and is swinging on either sides of 1.27 handle during late Asian market hours. The technical oscillators including Momentum and the Relative Strength Index both remain in the neutral territory. The Slow Stochastic is elevated making a bearish crossover just below the overbought territory. The holiday-thinned session is expected to see GBP/USD remain locked in range bound price action with resistance at 1.2750 and 1.2800 handle to the upside and support at 1.2660 and 1.2600 handle to the downside respectively.

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