Today we would take a brief look at the GBP/USD currency pair. Despite dropping massively last year due to the Brexit vote, throughout 2017 the British pound has managed to climb up a little bit. Its most recent rally happened during the second half of November when the USD was suffering from the political problems in the United States. Last week the pound began dropping again as it seemed that Brexit negotiations were headed nowhere, but after a deal was struck between the UK and the EU the pound began to find more support again. Since yesterday the British currency has managed to climb up past $1.34.
Right now it is a bit difficult to gauge the movement of this pair. The difficulty arises from the fact that the British pound is rallying on the good news that Brexit negotiations will move forward and trade relations with the European Union might be successfully established in 2018, now that the initial hurdle in the talks has been overcome. However, the dollar is also not going to give up the fight easily, since we received the long-awaited interest rate hike in the United States yesterday, and we expect possibly two or three more increases by the Federal Reserve next year. Nevertheless, despite the increase in interest rates yesterday, the American dollar didn’t properly break out versus major currencies and is in fact losing positions due to political uncertainty in the US.
In terms of the daily chart, we have our pivot point for the pair at 1.3384. The prices are currently trading above that level, so pay attention to the nearby resistances at 1.3457 and 1.3495, which may be attacked today. At the moment of this article’s publication the GBP/USD is trading around 1.3441, very close to the first daily resistance. If somehow the pair drops below the pivot point (which we don’t find very likely today), then look at the support levels at 1.3346 and 1.3273. Currently the indicators of technical analysis recommend a strong buy.
