Market Overview

GBP/USD Forecast: Mild-Bullish Short-Term Stance

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GBP/USD Forecast: Mild-Bullish Short-Term Stance

GBP/USD Current Price: 1.3158

  • UK Services sector stabilized in December, according to Markit.
  • UK PM Johnson to discuss a trade deal with the US in the upcoming months.
  • GBP/USD mild-bullish short-term stance, gains limited to 1.3284.

The GBP/USD pair surged to 1.3174, as panic selling stalled mid-European session following encouraging data from different economies, which helped worldwide indexes recover from intraday lows. In the case of the UK, the Markit Services PMI for December printed at 50, better than the 49.2 expected. According to the official report, “ the stabilization of service sector output was helped by a return to improving order books, as signaled by the sharpest rise in new work since last July.”

Meanwhile, UK PM Johnson announced that the UK would conduct post-Brexit trade talks with the US while it negotiates the terms of the future relationship with the EU.

This week, EU Commission President, Ursula Von der Leyen will head to London reportedly to start talks with Johnson. There are no data scheduled for release in the UK this Tuesday.

GBP/USD Short-Term Technical Outlook

The GBP/USD pair recovered after two days of sharp losses, settling in the 1.3160 price zone, just above the 38.2% retracement of its December slump. The pair offers a neutral stance in the short-term, as, in the 4-hour chart, it is hovering around a flat 20 SMA, while the 100 and 200 SMA also lack directional strength. Technical indicators recovered and currently head north, although the Momentum remains below its 100 level. Further gains are more likely on a break above the 1.3200 figure, en route to 1.3284, the high set on Dec 31.

Image Sourced from Pixabay

 

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