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GBP/USD Price: Still driven by Brexit headlines, finding support around a bullish trend line near 1.3050:
- The pair consolidates below the 200 SMA at the 4H chart. Brexit headlines keep traders entertained.
- Technical oscillators favour the bullish bias in the short-term.
GBP/USD Price is still affected by Brexit latest
Cable started the first weeks of 2020 showing a bearish sequence consolidating below the 200 SMA at the 4H chart. Brexit headlines will soon keep traders entertained ahead of the January 31st deadline to enact the break away from the European Union.
Also, trade war developments have been establishing the tone in the USD dynamics across the board. Which is why the demand in the greenback has slightly surged.
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1.3500 on the cards?
Overall, GBP/USD has formed a bullish trend line drawn from the lows of October 2019, which provides dynamic support. It already helped to put the pair in the road to the north, thus creating a choppy situation in terms of price action.
The mentioned SMA is capping further gains in the pair, and it seems like the 50 SMA wants to make a golden cross to give bullish signals. The nearest resistance lies at 1.3181, and if it manages to break such an area, Cable could point towards the 1.3306 level.
GBP/USD should break beyond that region to target the highs from December 2019 at 1.3506. After clearing that level, eyes will be on the 1.3743 level.
Trend line as dynamic support
At the downside, the bullish trend line is limiting declines, but it could give up in favour of the bears. If that were to happen, then it’s expected that a leg lower towards the 1.2773 level in a first degree will occur.
If the bears’ force breaks that region, the focus will shift towards the 1.2579 level. Which is highlighted as a critical demand zone.
Technical oscillators are signalling further gains in the quote. The RSI indicator is still above the 50 level, while momentum is targeting upwards. Favouring the bulls on a short-term basis momentarily.