Forex Trading: GBPUSD Technical Analysis – January 06, 2020
After a continuous drop-down for the last two trading days, Great Britain Pound (GBP) lifts up against the US Dollar (USD) increasing the price to more than 1.3000. The price increase occurs due to the release of favorable economic news. The technical bias, however, might remain bearish since the pair printed a higher low during the last upside move.
GBP/USD: Technical Analysis
As of now, the GBPUSD is being bid for the price near 1.3084, with almost three resistance levels coming across the way upside. The price may hit the first resistance level at 1.3144, the major horizontal resistance level which is likely to push the price back towards the downside. Then comes the trend line resistance near 1.3222, ahead of 1.3514, the high of December 13, 2019, as shown in the graph below.
Coming towards the downside, the price may receive strong support around two levels 1.2919 and 1.2735, where the first one is the major horizontal support level and the second one is the confluence of horizontal support and trend line support helping the price to stay above the current levels. If the price is able to fall through the said levels, then it may hit the Fibonacci level near 1.2551, which may also prevent the price from decreasing further as shown in the graph above.
GBP Markit Service PMI
The PMI service is a measure of the economic situation in the UK services sector r reported today, with a slight increase of 1 compared to last month’s 49 indexes, and also above the economist forecast of 49.2.
This provides an analysis of revenue and employment conditions. It is worth noting that the service sector in the UK does not affect the GDP as much as the manufacturing PMI does, either positively or negatively. Traders want the highest reading possible, as it will be considered positive for the GBP. Any reading above 50 indicates expansion, while a reading below 50 indicates contraction.
GBPUSD has a tendency to grow over time, as it has been noted from the above graph that, as from 1 October 2019, it is moving steadily towards development. Hence will be welcoming potential high returns to short- and long-term investors.