Cable continues to see upside limited at 1.3700 for now

Technical Analysis

GBP/USD keeps a more bullish near-term bias but gains remain limited by the 1.3700 handle in trading this week

Despite the dollar putting up a bit of a fight as of late, the pound is also staying more resilient as we see cable test the 4 January highs closer to 1.3700 yesterday.

The push higher stalled at the key level before retreating back towards the swing region around 1.3620-30 as buyers continue to keep a more bullish near-term bias in the pair.

The key near-term region to watch in that regard is the confluence of the key hourly moving averages @ 1.3590-94, as the focus towards Powell and Biden’s speeches today.

The pound side of the equation is basically just that, as in the quid is managing to brush aside economic concerns with regards to the UK virus situation and the post-Brexit ordeal.

I would still argue that those issues may still bite at the pound later but the shove lower in EUR/GBP does make a case that now is not the time for that just yet.

It is all about the dollar side of the equation for now as we look towards the trading day ahead and the key risk levels can be defined and limited on either side as above.

Break above 1.3700 and there is a clear path (from a technical perspective at least) for cable to potentially target 1.4000 next. On the flip side, a nudge back below the key hourly moving averages will see sellers resume control and looking towards the swing region around 1.3540-50 next first before the 1.3500 handle comes into play.
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