The GBP/USD continued its uptrend in January even as the US dollar index rose. The pair is trading at 1.3697, which is close to the highest level since April 2018. In this article, let’s look at what to expect in February.
What happened: The GBP/USD price rose in January mostly because of a statement by Andrew Bailey. After an MPC member said that she supported negative interest rates, Bailey responded by talking about the difficulties of such rates.
Therefore, investors interpreted this to mean that the bank would not push them to the negative zone. Still, investors are concerned about the deteriorating British economy because of the lockdowns. Therefore, focus will shift to February 4 when the bank will deliver its interest rate decision. Precisely, they’ll want to see whether the bank will change its tone on negative rates.
GBP/USD technical outlook
The four-hour chart shows that the GBPUSD pair has been on an upward trend recently. It has remained above the 15-day and 25-day exponential moving averages. Also, it has formed an ascending channel that is shown in blue. This pattern can be traced back in September last year.
Therefore, I suspect that there will be a breakout in February. The points of interest in February will be the support at 1.3606 and the resistance at 1.3662. If the pair moves above the resistance, it will mean that bulls have prevailed and that they will try to test the upper side of the channel at 1.3800.
On the other hand, if it moves below the support, it will be a victory for bears, meaning that the pair will likely move to 1.3500.
GBPUSD technical chart