GBP/USD surged in December, after UK Conservatives won the elections by a clear margin, which finally gives a direction for Brexit, as well as makes UK politics more certain. But, the optimism faded quickly after traders realized that a trade deal with the EU in one year is not enough and the UK economy is continuing to weaken.

As a result, GBP/USD has turned bearish now, continuing to decline in the last month or so and making lower highs, which shows that the pressure is on the downside now. Earlier, we saw the UK earnings beat expectations and remain unchanged for November after softening for several months and employment increased.

As a result, the GBP reversed higher and turned bullish for some time. But, I think that the retrace is now complete and the 100 SMA seems to have turned into resistance on the H4 chart. That moving average rejected the price in the first attempt and GBP/USD was pulling back lower. But, the 200 SMA (purple) held as support and the price has bounced off it, nearly 200 pips higher.