GBP/USD: Deal Or No Deal? Boxed-In Boris May Unleash A Rally

Markets will want to see if the recent increase in jobless claims was a one-off event or an ugly turn to rising unemployment. Personal Income and Personal Spending are also of interest.

Last but not least, the Federal Reserve’s Meeting Minutes from the early November decision could shed light on the bank’s bond-buying intentions. Jerome Powell, Chairman of the Federal Reserve, opened the door to expanding the Quantitative Easing program, but investors are unsure if a move is imminent.

If most members seem concerned and ready to act, the dollar could fall. Otherwise, the safe-haven greenback could attract buyers. The bank has been urging lawmakers to act, yet to no avail.

Here the upcoming top US events this week:

GBP/USD technical analysis

Pound/dollar has been extending its gains in the uptrend channel accompanying it since late September. The currency pair is trading above the 50-day, 100-day and 200-day Simple Moving Averages and benefits from upside momentum on the daily chart. Moreover, the Relative Strength Index is below 70, thus outside overbought conditions.

Overall, the bulls are in the lead.

Some resistance awaits at 1.3275, which capped GBP/USD back in August. November’s peak of 1.3310 is a critical hurdle. The uptrend resistance line hits the price at around 1.3360, and it is followed by 1.34 and 1,3510, which played a role in the past.

Significant support awaits at 1.3180, which held cable down in mid-October. Further down, 1.31 was a low point in mid-November, and the psychologically significant 1.30 level is also where the 50-day SMA hits the price. The next cushion is at 1.2860.

GBP/USD sentiment

Even without an imminent Brexit deal, the prospects of further easing from the Fed and Britain’s pole position on vaccines imply further upside for the currency pair.

The FXStreet Forecast Poll is pointing to short-term gains before falls coming later on. Experts have upgraded their average forecast for the upcoming week but seem skeptical about its longevity.

 

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