Key Points
- The British Pound recently recovered from the 1.2318 low against the US Dollar, but failed to hold gains.
- There is a bearish trend line formed on the hourly chart of GBPUSD, which acted as a resistance near 1.2388.
- In the UK today, the GfK Group Consumer Confidence was released.
- The result was better, as there was a rise from the last reading of -8 to -7 in Dec 2016.
GBPUSD Technical Analysis
The British Pound struggled lately and traded as low as 1.2318 against the US Dollar before starting a recovery. The upside move was stalled near a bearish trend line formed on the hourly chart of GBPUSD near 1.2388.
The same level also coincided with the 38.2% Fib retracement level of the last wave from the 1.2505 high to 1.2318 low.
The pair is back down, and closed below the 21 hourly simple moving average. So, there is a chance of a downtrend resumption, taking the pair back towards the last swing low of 1.2318.
GfK Group Consumer Confidence
Today in the UK, the GfK Group Consumer Confidence, which is a leading index that measures the level of consumer confidence in economic activity was published. The market was positioned for no change in the index from -8 in Dec 2016.
However, the result was better, as there was a rise from the last reading of -8 to -7 in Dec 2016. Commenting on the report, the Head of Market Dynamics at GfK, Joe Staton, stated “The past 12 months were a really turbulent year for confidence in the UK as consumers reacted to the dramatic economic and political turmoil of 2016. After a positive start to the year [January 2016, +4] the index plunged rapidly in post-Brexit Britain [July 2016, -12] with the recovery to September then evaporating by year end to limp home at -7 for December”.
Overall, the British Pound remains under pressure and may trade towards 1.2320 in the near term vs the USD.
