GBP/USD Tests Double Top Level – Brace for a Bullish Breakout!

The GBP/USD is trading sideways, below an immediate resistance level of 1.3698. The US dollar fell almost 0.3% on Tuesday, compared to its rivals, while the 10-year US Treasury yields fell to a session low of 1.146%. The US stocks opened higher on Tuesday, rebounding from the losses of the previous session, as investors looked for additional fiscal stimulus, amid continued political turmoil. The Dow Jones Industrial Average closed 0.3% down, and the S&P 500 closed 0.6% lower, while the NASDAQ fell by 1.2%.

The United States lost more than 22,000 Americans to the coronavirus last week, recording a second straight weekly record that brought the death toll to 375,000. The rising number of deaths and the associated economic damage prompted President-elect Joe Biden to promise further economic stimulus to the tune of trillions of dollars late last week. More details are expected to follow in a formal announcement on Thursday, and this has been supporting markets at their current elevated level. The weakness of the US dollar might extend the buying trend in the Cable.

On the technical front, the Sterling may face resistance at the 1.3698 level, and closing of candles below this level could drive a bearish correction in the GBP/USD pair. The MACD suggests a selling trend along with the double EMA; thus we should look for sell trades below 1.3698 and buy above the same level today. Good luck!