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GBP/USD Forecast: Will Likely Accelerate Its Decline On A Break Below 1.3050

Valeria Bednarik - Chief Analyst at FXStreet

GBP/USD Current Price: 1.3081

  • UK inflation came in slightly better than anticipated in November, still below BOE’s target.
  • UK PM Johnson speeding Brexit preparations, to announce government’s priority this Thursday.
  • GBP/USD will likely accelerate its decline on a break below 1.3050 the immediate support.

The GBP/USD pair remained under selling pressure, settling below the 1.3100 figure and nor far above a daily low of 1.3059. The UK published November inflation figures, which ticked up to 1.5% YoY in November, below the BOE’s target and in-line with its recent downtrend. The soft readings came in one day ahead of the central bank’s meeting, and the latest employment and inflation figures reinforce the precedent idea of an on-hold stance.

Ahead of the event, the kingdom will publish November Retail Sales, foreseen up by 0.3% when compared to a year earlier.

Also, UK PM Johnson would announce his government’s legislative priorities this Thursday, with delivering Brexit at the top of the list. Ahead of the event, the PM spokesman said that the Withdrawal Agreement Bill will include provisions for lower British courts to overturn the European Justice Court's rulings.

GBP/USD Short-Term Technical Outlook

The GBP/USD pair is technically bearish, with further declines likely on a break below 1.3050, December 12 daily low, and the immediate support. In the meantime, technical readings continue supporting a bearish extension, as, in the 4-hour chart, the pair is battling around its 100 SMA while the 20 SMA turned further south above the current level. Technical indicators lack clear directional strength but hold near oversold readings.

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