FX.co ★ Technical analysis of GBP/USD for December 23, 2020

Overview :

The GBP/USD pair has extended its gains, nearing 1.3437 (double top on the H1 chart). Pound/Dollar : with optimism for vaccines and the peaceful transfer of power in the UK continues at its highest price, nearly two or three week ago.

The GBP/USD pair continues to move upwards from the level of 1.3437. Today, the first support level is currently seen at 1.3321, the price is moving in a bullish channel now.

Furthermore, the price has been set above the strong support at the level of 1.3321, which coincides with the 38.2% Fibonacci retracement level.

This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the GBP/USD pair to trade between 1.3321 and 1.3624.

It may witness a further upward expansion if it comes with a report the Fed is a negative interest tone, but any gains in the GBP against the dollar will not be far from the Coronavirus (COVID-19).

So, the support stands at 1.2379, while daily resistance is found at 1.3516. It should be noted that volatility is very high for that the GBP/USD pair is still moving between 1.3379 and 1.3516 in coming hours.

This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 1.3379 and further to the level of 1.3516.

Therefore, the market is likely to show signs of a bullish trend around the spot of 1.3379 - 1.3437. In other words, buy orders are recommended above the spot of 1.3379 with the first target at the level of 1.3516; and continue towards 1.3624.

At the same time, if a breakout happens at the support level of 1.3321, then this scenario may be invalidated.