Hi, dear traders!
According to the H1 chart, GBP/USD continued to climb after settling above the retracement level of 76.4% (1.3675). The rising trend channel indicates the sentiment of traders remains bullish. The pair has repeatedly failed to close above the trend channel over the past six weeks, but if it does succeed, it could reverse downwards towards the retracement level of 61.8% (1.3576). Today, UK GDP data for November were released. The economic growth has beat market expectations, but the pound has barely risen in response. It seems traders were more interested in this week's hawkish reports from the Fed. The new wave of the pandemic caused by Omicron could seriously affect UK GDP data for December and January. The skyrocketing number of infections have put severe pressure on the National Health System and the economy, as many workers are in hospitals or in isolation. UK industrial production data also exceeded expectations, rising by 1% in November.
According to the H4 chart, the pair continues its upward movement. It previously did not close below the ascending trend line, despite the emergence of two bearish divergences. The pair settled above the retracement level of 38.2% (1.3642) and it could continue to rise towards the Fibonacci level of 23.6% (1.3870). If GBP/USD closes below the trend line, it could decline towards the retracement level of 50.0% (1.3457)
US and UK economic calendar:
UK - GDP data (07-00 UTC)
UK - Industrial production data (07-00 UTC)
US - Retail sales data (13-30 UTC)
US - Industrial production data (14-15 UTC)
US - UoM consumer sentiment index (15-00 UTC)
The US data releases could influence traders.
Outlook for GBP/USD:
Traders are advised to open short positions if the pair closes above the ascending trend line at the H4 chart, targeting 1.3497. Previously, traders were recommended to open long positions targeting 1.3642, because the pair rebounded off the 50.0% Fibo level (1.3497). If the pair settles above 1.3642, these long positions could be kept open.