GBP/USD Breaks Downtrend at 1.2000; Time to Buy?
Skerdian Meta • 2 min read
GBP/USD is hovering around 1.2010 as it seeks clarity amid contradictory signals and the end-of-year holiday season. The cable pair GBP/USD welcomed bears the previous day as US Treasury rates supported the US Dollar. However, Covid-linked optimism in the UK and China serves as a price floor.
China, on the other hand, launched a slew of measures to open national and international borders in order to allay COVID-19 anxieties. In doing so, the dragon kingdom initially ruled out the quarantine need for inbound travelers before announcing that citizens can apply for ordinary passports for tourism and travels abroad beginning January 8, 2023.
Nonetheless, a US official told Reuters that the US administration may impose new COVID-19 measures on Chinese visitors to the US due to concerns about the “lack of transparent data” coming from Beijing.
It’s worth noting that the virus’s favorable reports rekindled hawkish concerns about the US Federal Reserve (Fed) and drove US Treasury yields, allowing the US Dollar Index (DXY) to restore upside momentum the previous day. By press time, the dollar index vs. the six major currencies has risen to around 104.20.
Among these bets, 10-year Treasury bond yields are hovering above 3.85% after hitting a six-week high the day before, while S&P 500 Futures are hesitant after mirroring the mixed closing of Wall Street benchmarks.
Moving on, the US pending home sales for November, which are expected to be 0.6% higher than the previous reading of -4.6%, could adorn the calendar but are unlikely to impact the market during the holiday season.
GBP/USD Technical Outlook
The GBPUSD pair bounced bullishly after testing the 1.2000 barriers and is now trading at the 1.2010 level. The double bottom pattern is now offering strong chances of a bullish reversal. On the upside, the GBP/USD’s resistance stays at 1.2045, and a break above this can lead toward 1.2085.
Today’s trading range is predicted to be between 1.1980 support and 1.2140 resistance.
Today’s predicted trend: Bullish above 1.2000