GBP/USD Price Analysis for 13 January, 2021
- GBP/USD has now recovered all the ground lost last week.
- GBP/USD edged higher on Wednesday, albeit lacked any strong follow-through buying.
- The latest move reflects a weaker US Dollar prompted by a decline in Treasury yields from their recent highs.
The GBP/USD pair traded with a mild positive bias through the early North American session, albeit seemed struggling to build on the momentum beyond the 1.3700 mark.
The uptrend in GBP/USD , in place since last September, looks to be resuming after last week’s correction lower – with the chart suggesting further gains to come. The latest move reflects a weaker US Dollar, which is suffering from a move lower in Treasury yields after their recent gains.
Pound/dollar continues trading in an upwards channel and is nearing the 2021 peak of 1.370 and also the highest since 2018. While momentum on the four-hour chart is positive, the Relative Strength Index is hitting the 70 level and entering overbought conditions. That may result in a downside correction.
From a technical perspective, the overnight breakout momentum through a short-term descending trend-line resistance supports prospects for additional gains. The constructive set-up is reinforced by bullish oscillators on 4 hourly/daily charts.
Beyond 1.370, the next levels to watch are 1.3730 and 1.3810, last seen in 2018On the flip side, the daily swing lows, around mid-1.3600s, now seems to act as immediate support. Any subsequent slide might attract some dip-buying and help limit the downside near the trend-line resistance breakpoint, around the 1.3600 level.
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