GBP/USD Forecast: At Risk Of Extending Its Bearish Correction Toward 1.3190

GBP/USD Current Price: 1.3336

• UK PM Johnson to bring the Brexit bill to Parliament next Friday.
• UK Markit manufacturing and services indexes contracted further in December.
• GBP/USD at risk of extending its bearish correction toward 1.3190.

The GBP/USD pair has spent the first day of the week consolidating its post-election gains between 1.33 and 1.34. The pair advanced to 1.3422 amid dominant risk appetite but retreated on the back of poor UK data. According to Markit, the preliminary estimate of the December Manufacturing PMI fell to 47.4, below the previous 48.9, and missing the market’s expectations. The same happened to the Services Index, which contracted to 49.

In the Brexit front, UK PM Johnson’s spokesman said that the government plans to start the process for the withdrawal agreement bill before Christmas, and indicated that they plan to bring it back to Parliament as soon as this Friday. Meanwhile, the UK will release its latest employment data this Tuesday, with the ILO Unemployment rate seen ticking up to 3.9% in October from 3.8% in the previous month.

GBP/USD Short-Term Technical Outlook

The GBP/USD pair is pressuring its daily lows at around 1.3320, but still bullish according to intraday charts. In the 4-hour chart, the 20 SMA maintains its bullish slope above the larger one and below the current level, while technical indicators hover within positive levels, lacking clear directional strength. Speculative interest is still looking to buy the Pound on dips, although a break below 1.3270 could see it sliding toward th3 1.3190 price zone before buyers decide to jump back in.

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