GBP/USD Forecast: Selling interest growing around 1.3500

GBP/USD Current price: 1.3492

• The UK reported record coronavirus contagions for a second consecutive day.
• GBP/USD keeps losing bullish momentum, holds amid broad dollar's weakness.

The GBP/USD pair managed to advance in the last few sessions but struggled to extend gains beyond the 1.3500 level, peaking for the day at 1.3522. The advance resulted from the broad dollar’s weakness, as demand for the pound continues to be undermined by Brexit and coronavirus-related headlines. About this last, the UK has reported over 53K new coronavirus cases in one day this Tuesday, unprecedented infection levels in the country.  

Regarding Brexit, the UK Parliament is scheduled to discuss it this Wednesday. According to the latest headlines, a group of pro-Brexit Conservative lawmakers will back the EU-UK agreement after concluding that it “preserves the UK’s sovereignty.” Early Wednesday, the UK will publish December Nationwide Housing Prices, seen at 6.7% YoY.

GBP/USD short-term technical outlook

The GBP/USD pair is trading in the 13490 price zone, with limited bullish potential. In the 4-hour chart, the 20 SMA acts as dynamic resistance around 1.3520. The longer moving averages remain below the current level, without directional strength. Technical indicators remain below their midlines, indicating absent buying interest. A steeper decline could be expected on a break below 1.3420, a strong static support level.

 Support levels: 1.3465 1.3420 1.3360

Resistance levels: 1.3520 1.3550 1.3595

View Live Chart for the GBP/USD