GBP/USD : Under Pressure

(Thu, 28 Jan 2021). GBP and other currencies are falling against the US Dollar Thursday as a deterioration in sentiment leads to another flow of money into the safe haven USD. For GBP/USD, much will depend on whether and when confidence returns but in the near-term the pair is again testing trendline support and, if it breaks, further near-term losses can be expected.

GBP/USD PRICE CHART, ONE-HOUR TIMEFRAME (DECEMBER 30, 2020 – JANUARY 28, 2021)

The trendline currently checks in around 1.3630 and any fall below there could easily take GBP/USD down to 1.36. Note though that the trendline has been tested before and each time it has held. If that happens again there could be a swift move back to 1.37 and above. From a fundamental perspective, there has been little news to explain why sentiment has deteriorated in the markets generally but it could be seen as a healthy correction lower that will be followed by further gains for stocks and currencies like GBP, AUD, NZD and CAD.

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