Nothing has been left after the initial jump of GBP/USD in response to the better-than-expected reading of the PMI index for the British industry. In addition, the attitude of investors to the pound has not changed - its future is still largely dependent on the progress of Brexit.
Putting aside the swing from the last days, investors are now focusing on the brexit case. In the following days, one should expect numerous comments from the British political scene related to the vote on the draft agreement with the EU, which is to take place on January 14. The debate on the project will start on 7 January with the return of the House of Lords to the meeting.
Let's now take a look at the GBP/USD technical picture at the H4 time frame. The liquidity situation of the market in the interwar period shook the pound. On Monday, we saw strong increases from USD 1.2680 to 1.2810. We have not seen such a large daily volatility since December 12. At the beginning of last month, GBP / USD fell to 20-month lows, which was certainly a painful result for a part of the market and later could also be behind attempts to improve the result at the end of the year. Technical breach of resistance in the region of 1.2660 / 00, and then at 1.2750, fueled the rally of the pound. But with the return of trade to regularity and with the help of a worse peri-market sentiment, we see a dynamic realization of profits from the upward movement. The market has broken below all of the local technical support levels and made a new low at 1.2433 after printing very bigh Pin Bar like candle. Currently, the price is consolidating around the level of 1.2551, just below the technical resistnace at the level of 1.2586. The short-term outlook remains neutral to bearish.
