- Summary:
- GBPUSD finished 2019 strong as the currency pair closed the year with a 145-pip gain. With PMI reports due today, will it be able to extend its gains?
GBPUSD had a strong finish to 2019! The currency pair rallied without a hitch from its daily open price at 1.3111 to an intraday high of 1.3282. By the end of the New York session, it had settled at 1.3256 with a 145-pip gain.
Profit-Taking and Disappointing US Consumer Confidence
Aside from investors profit-taking from their long-dollar positions, it may have also helped the pound that data from the US missed forecasts. The Conference Board reported that consumer confidence for December was at 126.5. This figure was lower than the market’s 128.0 consensus and the reading for November at 126.8.
PMIs Due from the UK and US Today
For today, the UK’s final manufacturing PMI for December is due at 9:30 am GMT. No changes are expected from its initial readings at 45.9. Meanwhile, a few reports are also due from the US later today. At 12:30 pm GMT, the Challenger Job Cuts report is due. Then at 1:30 pm GMT, the unemployment claims report is eyed to print at 222,000 for last week. At 2:45 pm GMT, the US’ final manufacturing PMI report is estimated at 52.5.
A better-than-expected figure from the UK or disappointing US data could be bullish for GBPUSD. On the other hand, a worse-than-expected UK report or positive US figures may be bearish for the currency pair.
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GBPUSD Outlook
On the hourly time frame, we can see that GBPUSD has some room to trade lower and still maintain its short term uptrend. Connecting the lows of December 2, December 27, and December 31, we can see that the rising trend line falls around 1.3171. This price also seems to coincide with the 61.8% Fib level when you draw the Fibonacci retracement tool from the low of December 31 to its intraday high. Reversal candles around this price may mean that GBPUSD could soon be on its way up to its most recent highs at 1.3282.
If there are enough bids at its current price around 1.3250, we may not even see a pullback on the currency pair anymore. A strong close above its recent highs could mean that GBPUSD is on its way to 1.3489 where it peaked in December 2019.