GBPUSD Technical Forecast


The U.S. dollar remains on the defensive heading into the US payrolls release as Cable also continues to benefit from an unexpected upturn seen in the UK services sector activity. The 5 January GBPUSD Technical Forecast reveals more. Dig in!

5 January, GKFX– The post-UK services PMI-led rally extended into Asia, with the bulls sending GBP/USD to daily highs of 1.3567, before easing slightly to enter a phase of consolidation near 1.3560 region.

Key Quotes

  • DXY bounce loses steam.
  • 1.3600 still in sight amid risk-off seeping back?
  • Eyes on the US labor market report.

GBP/USD: USD continues to remain the key driver

The spot trades firmer and looks to regain the 1.3600 mark, as the US dollar remains on the defensive heading into the US payrolls release. Moreover, Cable also continues to benefit from an unexpected upturn seen in the UK services sector activity, reversing more-than-half the drop fuelled by downbeat manufacturing and construction PMI data from Britain.

In the run-up to Friday’s jobs release, the US dollar has mostly been selling off sharply since mid-December, due in part to doubts as to whether the US Federal Reserve can keep up with its most recent outlook for three interest rate hikes in 2018, given ongoing concerns over lagging inflation.

Hence, it remains to be seen whether the US payrolls data offers the much-needed respite to the USD bulls, with the headline figures expected to show +175k job additions while the unemployment rate is seen falling by a one-tenth fall in the unemployment rate to 4.0%, according to Goldman Sachs analysts.

5 January GBPUSD Technical Forecast

The 4 hours chart shows that the price is barely holding above a horizontal 20 SMA, while the Momentum indicator pressures its mid-line, and the RSI heads lower around 59, rather suggesting limited buying interest than indicating an upcoming bearish movement.

The risk of a bearish extension will increase only on a break below 1.3500 while an acceleration through the daily high should lead to a retest of its weekly high at 1.3612. Support levels: 1.3495 1.3450 1.3410. Resistance levels: 1.3560 1.3610 1.3655.

Disclaimer

This article “5 January GBPUSD Technical Forecast ” was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

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